Tribune, 23 April 1993

Britain needs a strategy to get it back to making things again, Labour’s spokesman on trade and industry tells Paul Anderson
The Sunday Timeswas less than impressed by Labour’s new industrial policy document, Making Britain’s Future, launched by Robin Cook earlier this month.
“The document marks a nasty U-turn away from the new realism of the pre-election industrial policy developed by Gordon Brown, the Shadow Chancel­lor,” boomed an editorial in its business section. “Labour’s corporatist, interventionist instincts are alive and putting the boot into the free market. Those who thought Labour had forsaken the ‘prof­its are dirty, bash big business’ mentality of the post-war decades are in for a rude awakening.”
Cook is dismissive of such criticisms. “The right-wing press has always tried to have it both ways,” he says. “On one hand, it accuses us of returning to the past; on the other, it says that we’re dumping everything that we once believed in. These are two inconsistent statements.”
He has no time for the idea that there is a crucial difference of emphasis between his own approach and Brown’s: “His stress on education and training fits very well with the emphasis we put on the short-term character of British industrial thinking and the need for long-term investment.” Far from ditching Labour’s late-eighties message, he says, the new document “builds on the policies of 1992”.
“If it has a more proactive tone, it is because the crisis in British industry has deepened since Meet the Challenge, Make the Change was drafted in 1989. What we have tried to do is inject a sense of urgency and crisis. The competition is no longer only Germany and Japan, it is also Taiwan and the other newly industrialised countries which, on present trends, will pass us at the beginning of the twenty-first century.
“We see a key, proactive role for government in developing an industrial strategy and co-ordinating the other players. This is not an attempt at some kind of western version of central planning. We’re not suggesting that it’s the job of civil servants to tell industrialists how to run their businesses. But it is the job of government to create the conditions in which those businesses can succeed.”
So is there a role for social ownership of indus­try? Cook believes that there is. “Government should be a major player in industrial strategy. That may mean, from time to time, that the gov­ernment should take a stake where doing so assists financial reconstruction or investment.
“Look at the case of Daf. When I visited Holland to discuss the Daf crisis, I met a Minister from the Dutch Labour Party (PvdA), who was anxious to express, first of all, that he was following a nation­al policy not simply a PvdA policy, and that, sec­ondly, because Holland had an industrial strategy, the Government could identify the circumstances in which it was appropriate to intervene. Daf is at the forefront of truck technology and is critical to a whole number of other suppliers – so the govern­ment took a holding of equity in Daf, not as a sub­sidy but as an investment. When the company re­turns to profitability, it will sell its stake.
That sensible, practical, far-seeing approach is light-years away from the approach of the British government. Nobody’s talking nationalisation, but for the British government to be willing to take eq­uity holding as part of a co-ordinated financial re­construction and rescue plan might have been sen­sible.”
According to Cook, the most important innovation in Making Britain’s Future is its analysis of the systemic problems that have held back British industry: the weakness of industry compared with the financial sector, the outmoded structure of the British joint-stock company, the over-centralisation of economic power, the instability of the business cycle (which discourages long-term investment) and “the cultural bias against industry”.
The document argues that Britain needs an industrial strategy “Builot on a national consensus that recognises the importance of manufacturing, and Cook is at pains to emphasise that Labour’s critique is not purely party-political.
The Conser­vatives have made things so much worse in several major ways,” he says, “But we need to look beyond their ghastly errors at the underlying reasons that we’ve had an industrial decline going back a centu­ry. Getting the Conservatives out is not enough to reverse it – although it certainly is a start.”
In policy terms, says Cook, there are three areas where Labour is making a particular effort to re­think its position. “First of all, we’re proposing a major change in the architecture of industrial and commercial life in Britain. There are some interest­ing parallels here with the analysis that Labour has developed over the past decade of the British political constitution and its programme for mod­ernising it and devolving political power from the centre. Companies’ constitutions need the same modernisation, and economic power needs the same challenge to its centralisation and concentration.”
Secondly, he continues, Labour has some new ideas on investment. “Of course, we have always stressed the importance of investment, but we’re now looking at new instruments of investment, try­ing to involve institutions in industrial investment that have previously not been involved,” he says, mentioning in particular the potential for getting pension funds and building societies to take long-term stakes in British industry.
“The third fresh point that we’re proposing is a new partnership between government and indus­try, taking on explicitly the argument of the free marketeers that the best thing that the govern­ment can do is nothing. Not only is this wrong in theory, it is also pointless in practice because all of our competitors have governments which are back­ing and helping their industry.”
A particular target for intervention is the defence sector, currently reeling from post-cold-war cuts. The defence market is a market that’s entirely cre­ated by government and it’s now collapsing precise­ly because of government decisions,” says Cook. The government has decided to buy less, for rea­sons that nobody is challenging. If you have a mar­ket in which government has called into being a whole raft of producers and then decided that it is going to cut the scale of that market, it has a plain obligation to intervene again to help those compa­nies find alternative markets.
The defence industries have two things lacking in civilian industry: sophisticated plant and a skilled workforce. If there is one decision that this government has taken in the past year that bor­ders on criminal negligence it is the way in which it has simply taken a hatchet to the defence research establishments with no attempt to plan the trans­fer of their skilled workforce with a background in research and development into industry.”
As well as being Labour’s industry spokesman, Cook is the most senior Labour figure to have pushed consistently hard for the introduction of a system of proportional representation for the House of Commons.
While many are disappointed that Labour’s Plant Commission on electoral systems decided last month to recommend a non-proportional system, the “supplementary vote” dreamt up by Dale Campbell-Savours and based on the alternative vote, Cook is sanguine.
“My response to the decision is that this is a breakthrough,” he says. “Having spent two years studying electoral systems, the Plant Commission has come to the conclusion that that the first-past-the-post system is inappropriate to the next centu­ry. I welcome that.”
Nevertheless, he is not prepared to back a sup­plementary vote system or any other alternative vote system without major qualifications. “It is in­teresting that a lot of people as individuals who have travelled down the road to reform have moved first through something like the alternative vote. I myself stopped off for a little while at the alterna­tive vote before moving on to proportional represen­tation. We’ve got to encourage the party collectively to travel down the same path. The party would be wrong to adopt AV or SV on its own. The FPTP sys­tem has polarised Britain by region in terms of rep­resentation. More than 1 million people vote Labour in the south of England and we get a couple of MPs.
“AV and SV do nothing to alter that regional po­larisation, nothing to increase Labour representa­tion in the south. By their very nature, AV and SV give power to second preferences. Labour is rarely the second preference: the party of the Centre witi always be the second preference.                  .. . .
“As a means of electing constituency representa­tives, SV is better than FPTP. But for the system to work, we need to supplement SV with added mem­bers on the basis of regional elections.”
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