To understand Manchesterism, Burnham’s book Head north is a good place to start. In it, he describes the sight Boys from Blackstuffa 1980s BBC drama about unemployed life during the Thatcher years in Liverpool. He recalls the impact it had on his mum, who had tears streaming down her face as they watched an old docker on display recalling the former glory of Liverpool’s waterfront. For Burnham, the play “remains one of the most powerful depictions ever made of the despair and loss of dignity that comes with unemployment”.
Deindustrialisation is the origin story for much of modern Britain. It is impossible to understand the state of our country – especially estates on the outskirts of large cities, and former industrial towns and villages – without understanding this. For all the attention paid to the Red Wall and the “left behind” in recent years, there has been very little discussion of deindustrialization, which is almost always the root cause of the pain.
While British industry began to decline in the 1950s, it wasn’t until Thatcher’s reckless monetarist experiment in the 1980s that things fell apart. As economic historian Jim Tomlinson describes, “the scale of job losses in such a short period in the early 1980s was extraordinary and was a major feature of Britain’s history in this period with long-term consequences”. This had detrimental effects on industrial areas: wages collapsed, jobs were lost, and as prosperity left, social problems shifted.
The tragedy is that while some degree of deindustrialization was inevitable, our scale and scope certainly was not. Many of our competitor countries maintain larger manufacturing bases and much heavier industries. like Sacha Hilhorst has arguedit may be better to consider former industrial cities as “actively rebuilt” rather than “left behind”.
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This was not a natural process. Instead, it was actively driven by bad ideas. One was that people should “bike” and move to areas of higher employment. However, as Nobel Prize-winning economist Esther Duflo has shown, people are “sticky” and movement is extremely difficult to achieve, even with significant economic incentives. Furthermore, the results for people who move are often very poor, partly due to the loss of social networks. Another bad idea was that replacing manufacturing jobs with an “information economy” would expand economic opportunity; the idea is that, in a “log-on” economy, it wouldn’t matter where you logged in. In fact, our service-dominated economy is much more geographically concentrated than our more balanced economy of the postwar years, in part because of agglomeration effects that reward economic clustering. As we have embraced an intangible economy, tangibles matter more than ever.
The uncomfortable truth is that not only did this process continue under New Labour, but he possibly intensified. In government, the party too often assumed that deindustrialization was inevitable; Like the changing of the seasons, little could be done about it. This collapse of interest in industrial policy means that Labor has run out of the intellectual resources to capitalize on today’s global moment. A time when the “new era of uncertainty” has led to a “new economic nationalism”; with governments around the world doing what they can to boost national production and re-industrialisation. It turns out that globalization was not like summer after spring, but in fact – like other political and economic paradigms – a temporary phenomenon.
Sadly, as is often the case with the British establishment, we are behind the curve. Just as in the 1930s our economic structure remained tied to orthodox economics, trying to balance budgets instead of spending, today our economic orthodoxy remains tied to the “dogma of utilities.” This is the idea that any attempt to revive industry or manufacturing is essentially a backward-looking picture, mainly because the UK has its strongest points in things like financial services. But that’s exactly the point. The UK has been doubling services for decades – which means we’ve doubled the economy of Greater London, with little to show for it. This is still without considering the huge national security concerns arising from our extreme case of deindustrialization; our inability to do the things that keep the lights on, that keep our military supplied and our nation safe.
That is why it is so welcome to hear more and more talk about the need for reindustrialization. However, it remains a relatively underdeveloped element of “Manchesterism”, especially compared to its critique of privatisation. Yes, the Mayor of Manchester can point to some exciting work happening at Atom Valley in Greater Manchester. But as analyst Rian Whitton has emphasizedindustrial sectors have not powered Manchester’s recent economic improvements. What would an “industrial Manchesterism” require?
First, a new industrial strategy worthy of the name. Much of our current industrial strategy is focused on services, particularly of a high-end variety, such as banking and law. Given their concentration in London, the South East and a small number of “core cities”, our industrial strategy fails to be a NAtIONAL industrial strategy. It should be updated with a much clearer focus on industry and manufacturing, underpinned by a new target to increase their share of Britain’s GDP.
Second, a review of procurement rules. Governments spend hundreds of billions; directing more of them to local suppliers, especially when buying manufactured goods, is not difficult at all. Indeed, everywhere but Britain governments seem to be developing nationalistic procurement agendas, from the long and deeply entrenched Made in America agenda, the Made in Europe agenda or Carney’s Canada Strong agenda. Surely the true return of Buy British isn’t too much to ask?
Thirdly, the reconstruction of “UK PLC”. Deindustrialization has been accelerated by the flogging of our industrial base to the highest foreign bidder. The mess we’ve gotten ourselves into with British Steel is exemplary – first it was sold to India’s Tata, then the Chinese, and now it’s rightfully back under public control by the government. If Manchesterism is serious about re-industrialisation, it must extend its interest in enterprise ownership to the extent of foreign ownership in sectors of the economy that will remain privately owned.
These changes will not be easy to implement. We must increase government spending on manufacturing and industry subsidies, requiring tax increases or spending cuts. We need to raise tariffs to protect British industry, which will raise prices for consumers. We need pension funds to invest more in Britain, which means potentially lower returns in the short term, rather than chasing maximum global returns.
It will mean confronting the many enemies of reindustrialization. All those who have benefited from these last 40 years will cry foul. Orthodox economists and think tanks associated with our current economic model will claim that there is no alternative to Britain’s current broken model. Their outsiders in the media will launch endless attacks: how this is a return to British Leyland or the white elephants of industrial policy of the past, such as Concorde.
Winning this battle won’t be easy, but there are alliances to build. In Labour, support for re-industrialisation can be found in every single faction or grouping, from the Labor Old Right to Labor First to the far-left Socialist Campaign Group. From the small conservative Blue Labor, to the soft left in the Tribune and Mainstream, the latter is closely associated with Burnham and of course the Red Wall Group. Much of the trade union movement is also fighting hard to protect what exists in our industrial base and to make sure we use government spending to re-industrialize. I also think the public is ready for a fight. They are appalled at the extent to which so many of our once mighty industrial cities have decayed; disgusted by the lack of productive opportunities for young people in this country; appalled by our reliance on other countries for our raw materials and supplies. If that energy is captured, who knows what is possible. While we cannot rewrite the script Boys from Blackstuffwe can begin to right the historical injustices in our former industrial countries. We owe these countries nothing less.
(Further reading: Andy Burnham’s Manifesto for Change)
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