Hot end rolling mill at British Steel, Scunthorpe. Photo Danny Lawson/PA Images.
Our class and our country are bound up with industry, that is, the work we do to produce the goods that make a civilised society. Industry embodies our independence and our national unity…
Successive governments have deliberately attacked our industry to destroy our organised working class. The deindustrialisation of Britain caused the steepest decline in manufacturing jobs among G7 countries.
It left former industrial regions bereft of jobs. Military contracts became the last source of manufacturing jobs in many areas. Governments gave subsidies to multinational companies in low-paid service industries to get rid of better-paid, unionised manufacturing jobs.
They told us that we didn’t need industry, that finance would make us all rich. Capital deserted industry and went to the finance sector where there were easier, richer pickings. As an example close to home, my father started his working life as an engineer, on a key project I’ll mention later. Then he inherited his father’s engineering business. After many years he sold it, and went into buying and selling property and into speculating on the stock market. From industry to finance.
In 1999, we still had over four million workers in manufacturing, now just 2.5 million. Production in key areas has declined sharply.
Steel
Steel production has fallen from 12 million tonnes in 2013 to 4 million in 2024. And between 2021 and 2024 chemical output fell 37 per cent.
The Brexit referendum aroused hopes of self-reliance, a rebirth of British industry, a rejection of anti-industry policies and culture. I remember asking one of my sons about what he’d learnt in school that day. They had been discussing factories and he’d learnt what factories produced – apparently, what they produced was – pollution.
Manufacturing industry is vital to raising living standards, to national defence, and to national independence. And now that Britain is independent again, we can use state aid to invest in industry and services, massively invest in necessary infrastructure like HS2, HS3 and Crossrail.
But still the City of London and finance capital control every government. While we allow finance capital to decide policy, we will not be able to gain the benefits of independence. We should make finance serve industry, to change society so that no longer will all our governments take their orders from finance capital.
Energy
There can be no industry without energy. But our factories pay about 50 per cent more for it than in Germany and France, and four times more than in the United States. The cost of power for industrial businesses in Britain has more than doubled, increasing 124 percent in just five years, according to government figures. Iron and steel were hardest hit – the average plant’s energy bill up 80 per cent.
The government continues to oppose issuing licences for new exploration in the North Sea, despite our reliance on gas and oil as part of the mix of energy sources.
The Lindsey oil refinery at Immingham, in North Lincolnshire, has fallen into insolvency, putting 400 jobs at risk. This follows the closure of Grangemouth near Falkirk in Scotland, leaving Britain now with only four oil refineries, down from 18 in the 1970s.
The electricity market allows natural gas power plants to demand exorbitant prices whenever the system needs to be balanced at short notice, when they’re paid to be on standby. Gas sets power prices most of the time. The result is unjustified economic rents to the gas companies. This will go on as long as we let gas companies run the market.
The government has announced, with great fanfare, its industrial strategy. This prioritises eight sectors – advanced manufacturing, clean energy, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. Eight priorities? Should an industrial strategy really prioritise financial services, and professional and business services?
The Department for Science, Innovation and Technology is to get £3.8 billion more in its annual capital budget – by 2029. The Department for Transport is to get only £1.8 billion more – a real terms cut.
These sums are dwarfed by the £14 billion extra on defence this year, rising to an extra £38.6 billion by 2035, and the £9 billion extra to the Department for Energy Security and Net Zero. The transition to net zero is to cost £803 billion between now and 2050 – £32 billion a year.
Infrastructure
The National Infrastructure and Service Transformation Authority said that infrastructure investment will have to rise to between £70 and £80 billion a year in the 2030s. Over half of this is supposed to come from private investment.
This repeats Labour’s private finance initiatives of the 2000s. Hundreds of PFI projects are still deep in debt and stuck in legal disputes.
We need investment in public infrastructure such as new roads, railways, or technology in universities. But PFI didn’t work last time round. Will it really work this time round?
‘Should an industrial strategy really prioritise financial services, and professional and business services?’
CND’s recent Alternative Defence Review made the point that different sectors of production have different effects on the wider economy. For example, spending on rail has a bigger economic multiplier than military spending.
Investing in health creates two and half times more jobs than military spending. Public spending on education also creates more jobs than military contracts.
But does this mean that we should end any spending that creates fewer jobs than other sectors do? Of course not. The comparisons are of interest, but they don’t tell us what we need to produce. Surely Britain needs its defence industry to be able to defend ourselves.
Producing fighter jets, nuclear submarines, warships, missiles, drones, and other weapons may not create as many jobs as health spending does. But it still brings economic benefits, from the spending by the workers and from technological spin-offs, which CND – curiously – failed to mention.
But with foreign ownership of our defence industries, all too many of these benefits go abroad. High profits are extracted but not reinvested in Britain.
The defence sector’s biggest firm, BAE Systems, is in effect a joint US and British company. A near majority of its capital is invested in the USA, and most of its major shareholders are US investment companies.
There are 164,000 jobs in the defence industry, around five per cent of the total working in manufacturing. For towns like Barrow-in-Furness, where BAE employs 9,500 workers, defence jobs are crucial.
The world’s very first jet engine was produced in Britain, as part of our World War Two defence effort. Building the first fighter jet pioneered the civil aviation industry. On a personal note, my father was one of the engineering team at Power Jets, led by Sir Frank Whittle. So secret was this work that he wasn’t allowed to tell anyone – not even anyone in his family – what work he was doing.
Finally, we need to invest in all our manufacturing industries, from steel to data centres, invest in skills – in our universities and colleges, and in apprenticeships. All are vital, all help to develop Britain as a civilised society, an industrial society.
• This article is an edited extract from the introduction to a CPBML public meeting in London in July.