I sometimes wonder how some politicians and commentators keep getting it so wrong. Juliet Samuel the Telegraph's columnist on politics, economics, and foreign policy, writes about the government’s new post-Brexit procurement bill which she argues doesn’t really move very far from the old EU procurement rules. It’s old wine in new bottles, she says. The new rules are supposed to overhaul the way the Government buys things with its budget of £300 billion a year. She wants to increase our economic resilience, rely less on foreign manufacturers and become more self-sufficient.
This is the essence of her argument:
“We are moving too slowly. The past two years, if not the trends visible before that, ought to have made it clear: we have allowed ourselves to become too dependent on others.
"We rely on global markets to supply our energy; we import doctors and nurses from abroad to supply our hospitals; we buy ships from Spain and chips from Taiwan; we cannot build nuclear power plants because we have run down our nuclear industry; we cannot build our own telecoms network or CCTV cameras because we prefer to buy them on the cheap from China; we have lost any chance of controlling the critical minerals needed to modernise our economy; we are too vulnerable to the caprice of others, whether it’s export bans on European vaccines or Chinese PPE.”
All true. I don’t disagree with her. We have lost a lot of homegrown skills. I know we have also done the same in the field of packaging, we now buy most of what we need from the EU.
The new bill proposes that government bodies will not have to award contracts to the most “economically advantageous tender” – generally interpreted as the cheapest – but can choose “the most advantageous tender”.
She thinks this is welcome but she also believes it’s just tinkering and isn’t going to radically improve the way the state uses its vast spending power. I agree. It won’t improve things. But not for the reason she thinks. In many cases, perhaps most, the EU companies usually aren’t the cheapest but are the most advantageous. It’s why people buy BMW and Mercedes. They aren’t known for cheapness although sometimes you find companies that are both the cheapest AND the best.
Her solution will make things even worse, not better.
Samuels says Britain under Thatcher had too many lame ducks and we started buying foreign-made goods “to keep costs down and stop pursuing an unworkable notion of British communitarian economics.”
But now she thinks we’re being taken advantage of because “countries such as the US, Japan, Germany, and France have been protecting their own suppliers for decades.” I really don’t think Siemens, Bosch or Toyota, or Honda need protection from anybody.
This is her answer:
“But there are other areas where we ought to be encouraging the emergence of strong domestic supply chains, in telecoms, health, energy, data, and defence, for example. And there are sectors where procurement policies could be used to update truly moribund industries, such as construction, infrastructure, and agriculture. This obviously doesn’t mean buying nothing from abroad, but it does mean giving government bodies the incentive and funding to foster innovation and build the critical capacity we are lacking.”
That’s it. We just need to start buying British. If only it was that simple. It's an insult to British customers who would buy British if it was any good or in a lot of cases if it was actually available. I mean where do you start buying home-produced advanced 5g telecoms systems in the UK?
If it was simply a question of buying British in the packaging industry as an example, it would mean a lot of everyday products - including foodstuffs - would never reach the market or would look terrible when they did. The supermarkets would be forced to offer substandard goods (and we would have no choice) with a shorter shelf-life or source from overseas.
Unless she legislated to stop Tesco from buying food from the EU, British suppliers would lose out. And if that is what she suggests, I hope she has also thought about rationing, malnutrition, and, food riots.
If UK suppliers were good enough, the government wouldn’t need to artificially direct orders to domestic suppliers, they would get the business anyway.
She is wrong because the way to resilience (and I think Europe’s reliance on Russian gas has shown what happens if you are beholding to one source) is to form regional blocs working under common rules and laws. It’s much easier to provide resilience and not lose the competitive edge.
Douglas Carswell, the former Tory, and UKIP MP responded on Twitter. He thinks that “true economic resilience comes from global interdependence, not self-sufficiency.”
I'm a massive fan of @CitySamuel but I think she is wrong about this. True economic resilience comes from global interdependence, not self sufficiency https://t.co/5rWv6H15x3
— Douglas Carswell🇬🇧🇺🇸 (@DouglasCarswell) January 13, 2023
He is equally wrong in the other direction. His is the Patrick Minford solution. Britain would rely on foreign despots for essentials and open our domestic food producers to competition from overseas industries that enjoy a huge advantage.
They are both deluded. You can neither legislate for nor sign trade deals to boost your domestic production. Buying British as a way of regenerating British industry would be a big mistake. But opening our market to foreign competition as Carswell and others want will also be a disaster.
The answer is to trade globally - but not too much - and to have as big a level playing field as you can to encourage fair competition.
They are both guilty of thinking there is a quick-fix solution. There isn’t. The answer is to change attitudes over the long term. To have a national plan. To be realistic, we are not world-beaters as we are constantly told. The sooner we accept that and stop blaming others, the sooner we will be on the long hard road to a more prosperous future.
Those among us who are still faintly rational in our thinking might say, isn't that what the EU is doing?
Instead, we have to reject Europe and seek out another club on the other side of the planet and join that. I assume we'll be perfectly happy until the CPTPP members make a new rule that we don't agree with when it will be all about 'barmy' CPTPP bureaucrats forcing the UK to switch to a diet of rice.
It will probably be the shortest-lived free trade deal ever signed. As soon as we rejoin the EU it will be redundant.
By the way, the biggest economy in the CPTPP by far is Japan with who we already have a trade agreement.
