William Keegan 

This belated Tory conversion to industrial strategy is tragic

The abandonment of laissez-faire capitalism would be welcome indeed – if the shadow of Brexit were not looming over our whole economic future
  
  

Sir Keith Joseph with Mrs Thatcher
Sir Keith Joseph, right, wrote in secret to Mrs Thatcher praising the UK’s membership of the EU for attracting Nissan to British shores. Photograph: PA

‘If America had a parliamentary system, Donald Trump … would already be facing a vote of no confidence. But we don’t; somehow we’re going to have to survive four years of this.” Thus wrote the Nobel prize-winning economist Paul Krugman in the New York Times recently. Unfortunately, although we in the UK do have a parliamentary system – indeed, the “mother” of them – the signs are that the majority of our parliamentarians are prepared to go along with the prime minister’s plan to invoke article 50 of the Lisbon treaty.

It was Edmund Burke who, in his celebrated address to the electors of Bristol, said that MPs should regard themselves as representatives of their constituencies, not delegates. As far as one can gather, although Conservative Brexiters such as John Redwood and Iain Duncan Smith make all the noise, the majority of MPs think Brexit is a crazy idea, with the potential to do enormous harm – and last a lot longer than four years of Trump.

The supreme court has now given our sovereign parliament the chance to derail Brexit, and has done so for good constitutional and legal reasons. But the odds are not good.

The Liberal Democrats are playing a blinder in their opposition. Unfortunately, they are a tiny minority. And my old friend Ken Clarke constitutes an even tinier minority, being reportedly the only Tory intending to vote against article 50, although a lot more of his fellow Tories are said to agree with him privately.

As for the Labour party, it is running scared of Ukip, especially in the north, but at least more than one Labour MP is prepared to stand up and be counted, in the belief that the national interest should be put above prejudice against immigrants in determining the country’s future.

Now, we have heard a lot recently about “post-truth” – that is, lies – but the Trump team’s “alternative facts” have certainly captured the public’s imagination. There is of course nothing new in all this: Thucydides and Herodotus were on to the story in ancient Greece, and George Orwell more recently. But the phrase calls to mind the way that Boris Johnson and his Brexit bus were touring the country not so long ago and undoubtedly persuaded some of the electorate to vote Leave as they proclaimed a false prospectus of, well, “alternative facts”.

David Davis, who goes by the Beachcomber-like title of secretary of state for exiting the European Union, managed after the supreme court had pronounced to stretch the meaning of language by proclaiming “this judgment does not change the fact [my italics] that the UK will be leaving the European Union”.

Well, if he, Mrs May and their band of Brexiters have their way, Brexit may well become a fact: but so far it is merely a prospect – and a distant one, destined to take many gruesome years.

Although some prominent Brexiters go on about regaining sovereignty and escaping the European court of justice, it seems to be widely accepted that the Leavers would not have won if they had not made such a fuss about immigration. They want us to sacrifice the future prosperity of this country, with implications for the government’s tax take that will almost certainly exacerbate the social problems associated with austerity, in order to regain control of immigration. Yet, as commentators have pointed out, immigration from non-EU countries, over which the government already has sovereign control, exceeds immigration from the EU. This is a shambles.

As Clarke points out in his brilliant memoirs: “The creation of the European single market was probably the biggest single boost to economic modernisation, investment, trade and jobs in the UK that the Thatcher revolution produced.”

Another, connected, achievement was the way that government persuaded Nissan and other Japanese companies to make the UK the base for their European operations – entirely because we were members of the EU.

Thus in 1980, several years before the single market came into operation, Sir Keith Joseph, secretary of state for industry – and not previously known for his belief in an industrial strategy – wrote a memorandum marked “secret” to Margaret Thatcher in which he stated: “If we were outside the [European] Community, it is very unlikely that Nissan would have given the United Kingdom serious consideration as a base for this substantial investment.”

His memorandum has finally been released to the public as part of the Thatcher papers. The timing is coincidental with last week’s announcement of the May government’s plans for an industrial strategy: a departure from the previously fashionable Tory approach of “leaving things to the market”.

In another paragraph of his memorandum, Joseph (or his private office, but with his approval) wrote: “Nissan would bring high-technology production methods and successful managerial techniques to this country and could help to demonstrate that high productivity can be achieved in the UK environment.”

This was prophetic, and quite a U-turn for Sir Keith, who had once been so anti-interventionist that he thought the department for which he was secretary of state ought to be abolished.

But we have reached the stage where the Japanese, among many others, are very concerned about Brexit, and Nissan is already having doubts about what was understood to be an earlier post-referendum commitment to keep investing in the UK.

The sad, indeed potentially tragic, thing is that, while it is welcome that the May government avows belief in an industrial strategy, any good from it will be threatened by Brexit.

 

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