His piece is: Covid has taught the UK the importance of self sufficiency.
Forsyth quotes a senior minister who has altered history slightly. Thatcherism has morphed into Blairism apparently because he (the minister) is reported thus: "The old certainties of globalisation have come crashing down. One influential secretary of state’s view is that 'it proves the error once and for all of the Blair-era assumption that the location of your manufacturing doesn’t matter'."
Having an epiphany like that when you have just cast yourself off from your biggest market and your largest and most vital supplier is, shall we say, a bit late.
The real damage was surely done under Margaret Thatcher and Keith Joseph who seemed to believe that British manufacturing didn't matter and anyone who couldn't compete must go to the wall. Unfortunately, huge areas of industry in this country couldn't compete with Europe and became takeover targets or went bust.
The article hints at the government adopting an 'industrial strategy' of some sort and it claims that somehow through government effort "around two thirds of PPE is being manufactured domestically; a dramatic change from the situation pre-pandemic when only 1 per cent was produced here."
This next bit then stood out:
"One cabinet minister argues that 'the same thinking applies to telecommunications companies'. The view in Whitehall is that the reason Britain ended up in the mess that it did with Huawei, a Chinese company with close links to the People’s Liberation Army playing a key role in the creation of our national infrastructure, was that there was no British national champion to do 5G."
Forsyth was told that, “the solution to Huawei is to build a British telecommunications company”, with the blame for the fact that this hasn’t happened so far being placed on “overzealous competition law”.
Equating a few plastic gloves with high-speed digital communications is a bit simplistic. It is what one commentator, who knows how this sort of thing works, has called "autarkic codswallop".
The Tories are full of councillors, accountants, lawyers and army officers (Labour is not much better) and have no idea how business works despite claiming to be the only party to support it. They didn't understand globalisation and they don't understand modern industry or integrated supply chains. This wouldn't matter so much if they listened to experts rather than their own ideas and prejudices. Had they done so we wouldn't be in the mess we are with Brexit.
You can't just start up an industry giant like Huawei just like that. From Wikipedia: Huawei started in 1987 and "overtook Ericsson in 2012 as the largest telecommunications equipment manufacturer in the world, and overtook Apple in 2018 as the second-largest manufacturer of smartphones in the world, behind Samsung Electronics. In 2018, Huawei reported that its annual revenue was US$108.5 billion. In July 2020, Huawei surpassed Samsung and Apple to become the top smartphone brand (in number of phones shipped) in the world for the first time."
Bear in mind that China has little protection of intellectual property rights. Foreign companies who manufacture in China have to share technology with Chinese companies who routinely copy products and steal know-how with impunity. No doubt Huawei benefited from that, we can't.
Also, an industry is not just one factory, it is a network of component manufacturers and suppliers built up over decades of both working closely and competing together, some splitting and forming competitors, growing the network all the time until it becomes very large and difficult to compete against. The network doesn't respect borders and suppliers may be in all sorts of different countries - mainly in Asia.
In the fast moving world of computers and telecommunications you couldn't just pump money in and 'build a British telecommunications company' and hope to compete for years and years - if ever - even if you could get parliamentary approval and avoid retaliation under WTO state aid rules. It is like boarding a moving vehicle at speed.
If there was the slightest understanding at the top of government this report of the closure of a GKN plant in Birmingham with the loss of 500 jobs would set alarm bells ringing. It assembled drive trains for UK vehicle makers. GKN was bought by the American company Melrose a few years ago and they were always looking to cut costs. The plant's output has dropped because of covid and it became uncompetitive but as David Bailey, a professor at Birmingham University says, Brexit is also likely to have been a factor:
“You have components coming into the factory to be assembled into drivetrains, before going into to British car factories. Even though we have a Brexit deal, the non-tariff barriers such as extra paperwork might mean that it was just not worth it in the long term, with car companies operating just-in-time models that can’t afford delays."
GKN’s automotive division apparently has more than a dozen manufacturing plants across Europe and components now built in the UK for domestic suppliers are likely to be produced in these plants. In other words you keep adding barriers and costs and eventually somebody decides it doesn't make economic sense to keep that factory open.
Talk of having an industrial strategy is ridiculous when the government has just placed the biggest obstacle ever in front of British suppliers. The 500 workers who's jobs are going will not easily or quickly be trained to work in Britain's Huawei.
In fact at the fundamental level, having an industrial strategy, if it means anything at all, means not crippling your own wealth creators. But that is what Brexit is doing.
I also note business leaders from the CBI, the British Chambers of Commerce, the manufacturers’ group Make UK, the Federation of Small Businesses and the Institute of Directors had another meeting with Gove yesterday, warning of ‘substantial difficulties’ at UK ports.
Afterwards they released a letter saying the government needed to act quickly to overcome “the sizeable obstacles” faced by exporters. Hold-ups at UK ports are worsening and many lorries making return journeys to the EU are empty following difficulties obtaining customs certificates, the business groups said ministers needed to 'act quickly'. It's not clear even what that means or what options they have.
Finally, ITV have a report that two thirds of trucks using the Channel ports back to the EU are actually empty at the moment. God only knows what this is going to mean for thousands of exporters in the first quarter. The best industrial strategy would be to rejoin the SM and get a single customs area. But don't hold your breath.
