The cancellation of the £80 million loan to Forgemasters, the Sheffield engineering company, is in the headlines again, after the news emerged that the Deputy Prime Minister had admitted that claims he had made in the Commons were wrong. As Tim has reported, the loan to Forgemasters would have created 180 new jobs in the nuclear energy industry and marked a real commitment to the future of British manufacturing.

The coalition’s position on the cancellation of the loan has not always been entirely clear. Sometimes the Prime Minister and Deputy Prime Minister have seemed to suggest that affordability wasn’t their only reason and that the loan was unreasonable, because the company’s owners were unwilling to sacrifice their capital stake. At Deputy PM’s Questions on 22 June, Mr Clegg certainly seemed to be saying that the owners were unwilling to finance the venture at the expense of their private interests: Read more »

   Filed under: Manufacturing | 1 Comment »

BAE Systems and industry association Aerospace, Defence and Security (ADS) have both warned that defence cuts threaten a number of large procurement programmes; orders for the Eurofighter are particularly at risk. Businesses are very likely to respond by looking for ways to increase exports. Read more »

   Filed under: Cuts Watch, Manufacturing | 1 Comment »

Graham Honeyman, the Chief Executive of Sheffield Forgemasters, put a brave face on today’s decision to axe an £80m government loan, which would have created 180 jobs at the company. Describing this as a “huge disappointment”, he said it is important now to focus on other elements of the company’s development.

Good for him. But the TUC can’t be this sanguine. We are trade unionists, so of course we care about the loss of 180 potential new jobs. But we also care about investment in the future strength of British industry.

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   Filed under: Energy, Manufacturing | 4 Comments »

In today’s Budget, the Government took a further step towards supporting strategic industrial sectors. Many of  those sectors will be ‘green’, both because there is a huge future in those sectors and because it is simply the right thing to do.

Central to this development is the £2bn Green Investment Bank, operating on a commercial basis  and involving public and private sector capital. The GIB’s mandate will be to invest in the low carbon sector, considering new energy and transport projects in particular, and focusing initially on offshore wind generation.

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   Filed under: Budget, Environment, Investment, Manufacturing | 1 Comment »

It is a sign of the pressure being felt at the heart of the eurozone that France and Germany, the main drivers of the European project, have had such a public spat in the last 24 hours. Yet the subject of that spat is a subject that has exercised many an economist as the economic downturn has progressed.

To recap, France has argued that years of moderate wage rises in Germany has raised the competitiveness of the latter country at the expense of its neighbours. Christine Lagarde, the French finance minister, has told the Financial Times that Germany should raise domestic consumption, helping weaker eurozone nations to boost exports and shore up their finances. Germany has responded by arguing that its success is based on strong companies and has suggested that other countries would be better off building their own industrial sectors in the German fashion than crying foul about German success.

Who is right? Well, both. Read more »

   Filed under: Economics, Europe, Financial crisis, Globalisation, Investment, Manufacturing | Comments Off

Today’s Financial Times reports on the TUC’s call for  a new strategic investment fund, with a budget of £5bn, to invest in key industrial sectors. This is one of a number of recommendations set out in our new policy paper, ‘Developing UK industrial policy: lessons from France’.

Five years ago, many would have rejected the idea that we could learn much from across the Channel. But after an economic downturn in which the French have suffered markedly less than the UK, the TUC felt it was prudent to understand why this was the case, and to see if there were lessons to be learned . Read more »

   Filed under: Economics, Financial crisis, Globalisation, Manufacturing | 1 Comment »

There are a number of issues at stake with the takeover of Cadbury’s by Kraft. Inevitably free market fundamentalists have accused doubters of being protectionists and little Britishers but the case against this takeover goes much wider than a defence of the iconic nature of the Creme Egg. But unions are right to fight back.

The biggest issue is that this is going to be largely funded by debt. This will mean that Kraft will have to extract significant value out of the business to pay interest and the loan capital. It is a perfectly reasonable public policy objective to discourage highly-leveraged bids of this type.

What makes this worse – as Nick Clegg very effectively pointed out at yesterday’s Prime Ministers’ Questions – is that some of the loan finance is coming from the  publically-owned RBS. It is indeed strange that RBS is funding something that the government has opposed. Read more »

   Filed under: Economics, Manufacturing, Multinationals | 3 Comments »

Buried in the companies section of the Financial Times today (possibly because it contradicts the news story which I have already blogged about), is a report of an interview with the head of Corus UK, Kirby Adams. Although probably not the most popular manufacturing boss in Britain because of his decision to mothball steel plants on Teesside (see Community’s campaign pages), he indicates that there is all to play for in developing a progressive, interventionist consensus on manufacturing strategy, rather than maintain the generation-long assumption that the market knows best. Read more »

   Filed under: Manufacturing | Comments Off

The Financial Times says Lord Mandelson’s manufacturing strategy is failing to convince manufacturing employers. But they use journalistic sleight of hand to make the evidence fit the story better, suggesting that the FT editorial line of support for tax cutting Tories rather than Labour investors has bled into the news pages.  Read more »

   Filed under: Manufacturing, Recession, They Just Don't Get It | 2 Comments »

The Times is in bullish mode this morning. It’s editorial, ‘Creative industry‘, starts controversially: “Few phrases strike more fear into British business than ‘industrial policy’”, it opines. Really? I was heartened to read how Lord Browne, former boss of BP and for so long one of the UK’s top industrialists, praised the interventionism of Tony Benn, of all people, earlier this year. “If the Government had not got involved, a lot of vital infrastructure would have been produced outside of Britain”, Browne reminded us.

Nevertheless, The Times editorial gets over its poor start with a thought provoking piece about the way in which the UK might pay its way in the global economy of the future. Read more »

   Filed under: Economics, Manufacturing | Comments Off

Industrialists have some reason to cheer after today’s publication of the Pre-Budget Report.

The PBR contained an additional £200m for the Strategic Investment Fund, the body set up in this year’s Budget to support the ‘New Industry, New Jobs’ initiative. Read more »

   Filed under: Investment, Manufacturing, Pre-Budget Report | Comments Off

Ed Miliband’s clutch of four national Energy Policy Statements, announced today, mark another key stage in our low carbon energy strategy. It’ll  help deliver up to 500,000 green energy jobs by 2020 set out in the Government’s Renewable Energy Strategy last July. This includes opportunities in the UK and from growing markets across Europe and globally.

Those calling for a smaller State and Budget cutbacks might heed this comment from the independent Committee on Climate Change in October 2009:

There is an approach to power generation that says emissions from the sector are capped and that we can entirely rely on the market to determine the appropriate path to decarbonisation. This is not, however, an approach that the Committee accepts. Whilst inclusion of the power sector in the EU ETS will deliver the emissions cuts required in the sector to 2020, it will not automatically bring forward the low-carbon investment to deliver required emissions cuts in the 2020s and beyond.

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   Filed under: Environment, Manufacturing | Comments Off