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HowToRunBritain.com

   

                               "Let's make this country stand for something brilliant again..."  Mary Portas

 

 

 

Bill Bryson "in a country where the last great invention was Cats eyes"

 

 

"It seems to me that when a nation's industrial prowess has plunged so low that it is reliant on Korean firms for its future economic security, then perhaps it's time to re-address one's educational priorities and maybe give a little thought to what's going to put some food on the table in ten years' time"

 

 

 

Mary Portas says:-

How did we allow this to happen? We closed the door on our own industries - and the results have been catastrophic. We must have been absolutely mad to throw it all away - with whole communities devastated by the loss of manufacturing.     more...

 

Ownership matters

It confers the right to decide.

 

 Yet Britain does not take ownership sufficiently seriously

We need a revolution in how our companies are owned and run

The idea of building a great British company that has  the long-term interests of this country at its heart, which invests in research and development and the nation’s future, and continues to pay UK corporation taxes, never seems to be a priority.

Successful UK companies continue to be taken over by overseas firms

"It is not xenophobic to harbour concerns that an overseas parent will prioritise employment and research and development  in its domestic market. The danger is that, so long as foreign predators are allowed more or less free rein, we will turn into branch office Britain, with all the good stuff going on abroad"    Ruth Sunderland

 

THE LATEST SELL OUTS :-

Edwards Group

Invensys

Another hi-tech leader sold off

 

The latest foreign takeover:  British technology firm sold to the Germans

 

Britain's fire-sale shows no signs of slowing down

 

'The Man Who Sold Britain'

 

How can it be that Penguin, one of the most innovative publishing companies in the world, ends up in the hands of a German firm that, 50 years ago, was only a quarter of Penguin's size?

 

German tank maker buys British firm who's planes sank the Bismarck - the latest example of British engineering expertise being snapped up by foreign wealth

 

Weetabix has become the latest British food manufacturer to pass into foreign hands

 

Raleigh, one of the most famous brand names in the bicycle industry, has been sold to Dutch

 

Milk snatching

 

Britain's bus manufacturer Optare sold off cheap to India

 

Great British icon EMI flogged off

 

Cunard waves goodbye to Britannia

 

Another Brit sellout - Autonomy sold to US

 

Where overseas ownership has saved British manufacturing from a failure of leadership

Inward investors can be a good thing where they enhance our industrial base. But there must be a clear distinction with overseas predators that dismantle companies and ship the brains of the operation overseas. The reason Germany has maintained its standing as an industrial nation is because it does not  give primacy to short-term shareholder value over the long-term national interest.

 

Why is the UK the only country without an industrial policy ? - even the US government has a conscious policy of 'picking winners' - and it works

 

Government officials are so obsessed by bureaucracy that they've forgotten what is in the national interest.

 

 

 

James Moore:

How long before the US flag

flies over the City?

(scroll down page}

 

 

Will Hutton:

Ownership Matters. For too long, companies and the rich worldwide, egged on by American Republicans and British Tories / New Labour, have shamelessly exploited the proposition that there is only one proper relationship between them and society - that they must be free to do what they want on their own terms. And society must accept this because it is the sole route to "wealth generation". Capital exists above state and society.

 

For every £1 invested by UK Government in research, the French invest £8 and the Germans £12.50

 

Ha-joon           Britain: a nation in decay          Ha-Joon Chang

Britain has been finding it difficult to recover from the financial crisis not just because of its austerity policy but also because of its eroding ability to engage in high-productivity activities. This problem is most tellingly manifested in the country's inability to generate a trade surplus despite the huge devaluation of sterling since 2008.

Compared with its height in 2007, the pound has been devalued about 30% against the dollar, 50% against the yen, and 20% against the struggling euro. Yet despite the huge incentive to export created by such devaluation, Britain is still running trade deficits because it has lost the productive capacity to respond.

Manufacturing exports, which were supposed to make up the shortfall created by the services sector, actually fell by 8% after the devaluation. This is highly unusual. For example, back when South Korea had a devaluation of similar scale after its 1997 financial crisis, the country's manufacturing exports were 15% higher

Without addressing the underlying decay in productive capabilities, Britain cannot fix its ailing economy. It urgently needs to develop a long-term productive strategy through a broad-based public consultation involving not just the government and private sector firms, but trade unions, educational institutions and research institutes.

The strategy should first carefully identify the industries, and the underlying technologies, that will be the future motor of the economy and then provide them with the necessary support. This could be in the form of subsidies for R&D, loan guarantees for small firms, or preferences in government procurement, and should be targeted at "strategic" industries.

Britain has spent an estimated £40bn on fighting the war in Afghanistan over a dozen years without our elected politicians voicing public concerns over that expenditure, which has yielded no gains whatsoever. The British political class will readily fund wars, but not invest in export industries that generate wealth and jobs

 

 

John Neill, founder of hugely successful UK company UNIPART, is a critic of predatory overseas takeovers, though he draws a distinction between these and the inward investment into the car industry.

 

‘Let me give you two contrasting cases. Was I in favour of Kraft taking over Cadbury? Absolutely not. Cadbury should have stayed a British company, and they could have fought harder.

 

‘But a very good example is Toyota coming into this country. Had Toyota, Honda and Nissan not come here, we would not have a motor industry. ‘But they taught us how to improve productivity and cut costs, and they are still doing it. Their coming in has been wholly good. It is about adding, about investing, not about being predatory.’

"Free trade has become our sacred ideology, which in a country that has turned its face against making things is a peculiar act of disempowerment."  Ian Jack

Ruth Sunderland:   There are those who believe that without the artificial stimulus of debt that produced the consumer and housing boom, the UK economy is a spent force – a post-imperial power with a dwindling industrial base forced to rely on the Square Mile to keep the rest of the British Isles afloat. But if we can get past these tough times and rebuild our debt-stoked economy on a sounder footing, the picture could be much rosier.

The UK economy can prosper again in the coming decades, but only if we make a decisive break with the recent, pre-crisis past. That means banks which lend to productive businesses rather than seeking to make fast money from speculation. It means some tough choices about government spending, and an end to the culture of entitlement that has permeated society, from overpaid bankers to some benefit claimants. And it means people who seek to improve their living standards through their skills and enterprise, instead of relying on houseprice bubbles.

Jonathan Glancey  

Why Britain should think about doing things the German way

The British economy is built on flimsy and unreliable foundations. We should be making more things

Bob Bischof:  Britain could have much to learn from German firms

The key to Germany's strength

For decades "industrial policy" was one of the most unfashionable terms in politics. But we are now done with bowing to the demands of the financial industry. Germany's strength – the strength that has made us the anchor of Europe – is the result of many years of hard work to maintain and modernise industrial production. It is also the fruit of our refusal to follow the trendy yet mistaken teachings of the City of London and Davos.  

(Frankfurter Allgemeine)

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Dr Olaf Ploetner of ESMT Berlin  explains why German capitalism is so successful:-

"Contribution to society is always a very important point”   "At the heart of the approach lies the cultivation of a market (e.g.China), even if the short-term results are not over-encouraging." This very long-range view that German industry has taken was recognised by the FT as far back as the 1970s.

Because a large part of German industry is family-owned, the short-term demands of shareholders, who want quick and relentless rises in the prices of shares, do not matter.

Many German firms, too, are owned by "foundations", often set up by the company's first generation of family founders. A foundation is an entity which owns something - like a company - but which is not owned by individuals.The Robert Bosch Foundation, for example, owns 92% of Bosch, the giant engineering company. But the goals of the Robert Bosch Foundation are partly philanthropic, so it doesn't act as profit-maximising shareholders might.

As Dr Ploetner puts it: "All the big German companies are organised in foundations, and the foundations do not have 'return on capital employed' as their most important goal. Contribution to society is always a very important point."

It doesn't mean that German companies are charities. But it does mean that German companies are less easily swayed by the vagaries of the moment and the threat of hostile takeovers like in Britain. Combine that with a very decentralised economy, and you have the picture of solid and steady prosperity.

The principal tenet of Germany's hugely successful economic system is the way in which capital, labour and the state organise their relationship. While there are conflicts, such as in wage bargaining, the relationship is at its heart a co-operative one. The apprenticeship system for young people aged 15 and over who do not go to university is one example. The employer pays a very moderate wage, usually about £500 a month, and provides training on the job; the apprentice foregoes a higher income for the duration of his training, and the state continues to provide schooling. All parties benefit from the apprentice's development: If they perform well, they are all but guaranteed a job in an enterprise he already knows while the employer sees their investment in training pay off eventually through higher added value on the part of their new employee – and the state has gained a young taxpayer. This explains the low rate of youth unemployment in Germany.

This tri-partite arrangement also works in times of crisis as in 2009. "Kurzarbeit", a short-term working scheme, allowed many German companies to survive a global slump in demand. Instead of firing workers when their machines stood idle, companies paid them only a reduced base salary. This salary was then subsidised by the state to avoid hardship but with the final pay-out well below normal levels. This preserved jobs and it made sure that employees' experience and knowhow was immediately available for the companies the very moment global demand picked up again. This is one of the reasons Germany came out of the crisis faster than other economies and now salaries and domestic demand are rising in real terms.

Low youth unemployment, economic growth, competitiveness in world markets, rising salaries and increased domestic demand are a reality. So, if the UK were to adopt the proven success of this model,  our whole society would benefit.  What are we waiting for?

 

Ruth Sunderland, former Business Editor of The Observer eloquently explains why we should be investing in factories, not banks:-

What really matters now is whether the UK can reshape its economy so that we can pay our way in the world without relying on the debt driven pseudo-growth of the New Labour years.   

Recent events hammer home - yet again - the terrifying fragility of supposed wealth created from credit and hot air.

Manufacturing creates real assets, not illusory ones that exist only on computer screens or in the incomprehensible footnotes to banks’ reports. It creates high value jobs, in the regions as well as in the financial hub of the capital.

That is why now, more than ever, we should remember the importance of our industrial base, and give thanks that we still have some of it left. There is no fundamental reason why Britain cannot be a great manufacturing nation again – if the will and the policies are in place.

The financial follies that are now flattening us have been matched by an equally foolish insistence that manufacturing did not matter. The denigration and neglect of industry in previous years, particularly under the last government, which preferred to spend its time promoting ‘Cool Britannia’ was shameful.

As a consequence, the UK now ranks only 17th in a survey of global manufacturing by Deloitte, behind Korea, Poland, the Czech Republic, Thailand and Australia as well as more obvious powerhouses such as the US, China and Germany. By 2015 we are expected to have fallen another three places to rank 20th out of the 26 countries analysed.

Part of the reason for this is that virtually any form of state support for industry was seen as anathema because of the of the 1970s, when taxpayers’ money was wasted on defunct and inefficient businesses. That was then, this is now. Rival manufacturing nations see targeted support as an essential plank of industrial strategy. The Deloitte study found 70 per cent of Chinese manufacturers put government support for technology, science and innovation at the top of their list of policy advantages.

How many bosses of firms in Britain would say the same, when governments have in recent years made a string of damaging decisions that undermined manufacturing. The cancellation of a loan to Sheffield Forgemasters to help fund expansion that would have created 180 skilled jobs is a case in point. Decisions like these, at a time when this country has never been in greater need of industry, are simply incomprehensible.

In advanced manufacturing, it is not enough to argue that rolling back the 'dead hand of the state' will in itself allow entrepreneurialism to bubble up.

Industries such as aerospace involve long-term projects with high levels of risk and very large investments, and that doesn’t happen by itself. Manufacturing needs the right climate. Manufacturers need stable long term finance, not banks with a short-termist mentality inimical to their requirements.

 

 

 

  UK receives lowest level of R&D support than any other economy

  What is the stock market for? Mainly enriching traders and middle men

     

 

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