Ed Miliband: UK needs a patriotic economic model for growth

Posted on 6 Mar 2012

Speaking at the EEF National Conference, opposition leader Ed Miliband said many UK manufacturers have succeeded “against the odds” as governments of both parties have not adequately supported the sector in the past.

Miliband said: “Governments of both parties have been right for decades to oppose protectionism, but too often this opposition has become an excuse for believing that the best way to help British business was to stand aside entirely. Opposition to protectionism was right, but opposition to industrial activism was wrong. From our government to our culture, we need pride and patriotism if our British firms are to succeed.”

The leader of the Labour Party urged the government to understand the need for an “active industrial policy” and to support manufacturing in the UK. He then slammed the coalition government, pointing to the delayed government loan to Sheffield Forgemasters, the controversial move to award a £1.4bn contract to German-based Siemens over engineering group Bombardier, which the firm said cost 1,400 Derby-based jobs, and cuts in the defence budget that led to falls in revenue at BAE Systems, resulting in the closure of its Chadderton site.

“From Sheffield Forgemasters, to Bombardier, to BAE Systems, I think government has let British business down. In particular, in energy they have done huge damage, ripping up the feed-in tariff, undermining the investment prospects of the wind industry and putting at risk Britain’s chance of leading the world in low carbon technology,” he added.

According to Miliband, a shared, long-term vision between the public and private sectors is necessary if the British economy is to grow. Reminding the audience of takeovers such as Cadbury’s, Miliband announced the establishment of a review by engineer Sir George Cox, former director general of the Institute of Directors and currently a director of the New York Stock Exchange, of what is impeding long-term decision making in British corporate life.

The leader of the opposition also called for a more diverse and competitive banking system that enables businesses to succeed, and for the creation of the British Investment Bank to provide state-guaranteed finance.

“If you have done the work, come up with the innovation, built up a business over a number of years, you shouldn’t be discriminated against because your business is considered too small or because you’re in a sector that is unfamiliar to the banks. Banks should be competing not just in how many derivatives they create but in how many small firms they serve,” Miliband says. “The largest four banks provide 85% of SME accounts in the UK, whereas in Germany only 14% of business loans come from the large commercial banks.”

Concluding his speech, he said that downgrading the Engineering Diploma from five GCSEs to one GCSE was a mistake the sent a wrong signal. Manufacturers, added Miliband, often say that the sector has a negative image among young people. To build the brand of British manufacturing and to inspire young people with the exciting opportunities engineering can provide them with, schools need to let businesses in and government has to play its part in promoting careers in manufacturing.

Roberto Priolo & Tom Moore