Welcome, Vince. Good to see you
1 min read
Liberal Democrat and now Business Secretary Dr Vince Cable must surely have the highest stock of any politician. He was one of very few who was warning about a looming credit crunch, many years before the event.
But what does he think about UK manufacturing? Well, a Daily Mail article, dated 12 March this year, is instructive (http://chilp.it/492569). The headline is: 'Banks won't save Britain – factories will', and the opening paragraph is: 'Does trade matter? Should we be bothered if Britain has a whopping deficit in manufacturing trade?'
Dr Cable's response is: "Well, yes, we should. A problem which haunted a generation of political leaders and chancellors is returning in a new form."
And he observes this: "After being broadly balanced for half a century, in the decade after 1997, Britain's balance of trade plunged to £60 billion – five per cent of our economy.
"This was the boom time on our Fantasy Island when imported goods were consumed on credit and exports suffered. Another £20 billion or so went on travel.
"Much of this deficit was paid for by financial services: banks and the rest of the City. But, as we have painfully discovered, banking is not some London-based El Dorado, pouring out everlasting riches for the economy to consume, but a highly precarious, risky industry that ultimately collapsed in a heap, and which we rescued."
He goes on to say that his economist's head tells him that devaluation will come to the rescue, but that while the pound has fallen, it hasn't delivered the positive kick, due to subdued demand in our export markets. And, as I write this, it has just been reported that Britain's trade deficit in March widened sharply. The gap rose to £3.7 billion in March, from £2.2 billion in February.
Dr Cable praises various efficient, exporting manufacturers by name, but adds that there aren't enough of them. However, he does not advocate the government "picking winners" – targeted, sectoral, financial support, I take this to mean – but talks about "creating a platform for a manufacturing revival".
We'll be interested to see the nature of this platform and how it differs from Labour's approach, which it must, or from the Conservatives' previous laissez-faire approach, which it also must.
