Category Archives: Manufacturing
A call for building strong productive local and regional communities and new trade systems that fulfil human lives without wasting resources and energy
Today the Financial Times (paywall) reports that the number of foreign investment projects has dropped by 14% to 1,782 in the financial year ending March 2019, since the 2016 Brexit referendum. This is the lowest level in six years, according to a report published on Wednesday by the UK’s Department for International Trade.
As multinational profits continue to fly out of the country and taxes are evaded, we return to the valuable 2017 report by Victor Anderson and Rupert Read entitled ‘Brexit and Trade Moving from Globalisation to Self-reliance’, published and launched by Green MEP Molly Scott Cato.
“This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.
Colin Hines comments: It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. On page 14, the report calls for ‘Progressive Protectionism’:
“Reducing dependence on international trade implies reducing both imports and exports. It is very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’“.
The report’s recommendations are summarised under three headings: the environment, globalisation and localisation (below):
- Change trade agreements to allow governments to promote greater national, regional, and local resilience.
- Shift taxes, subsidies, and public expenditure on infrastructure, away from unfairly favouring large and global companies, and redirect them to help build up local economies.
- Link banking directly to local and regional economies rather than to the international financial system.
- Boost the number of places for skills training in sectors where UK production can substitute for imports.
- bring in short-term government subsidies to invest in and develop economic sectors where UK production can be expected to substitute for imports as part of the new strategy. These would not necessarily be ‘infant industries’: they might be old sectors being revived and renewed.
- Introduce or increase tariffs on imports of goods and services, especially those where domestic production is a viable and environmentally sustainable option.
- Democratise English sub-regional devolution arrangements and reform local government finance, so as to provide for effective decentralisation of power.
The globalisation of recent decades has been very one-sided. There have been enormous benefits for large business corporations, financial institutions, and the super-rich. As smaller companies have found it difficult to compete, the multinationals have used a worldwide network of tax havens to escape from taxation and regulation.
‘Brexit and Trade’ sets put a new option for Britain. Instead of removing protective regulations against environmental threats it advocates establishing high Green standards and practical localisation measures. It would address the very real social, economic and environmental problems of globalisation, serving present and future generations well.
Though Cammell Laird’s Birkenhead shipyard won two contracts this month, worth a total of £619 million, to provide spares, repairs and do maintenance work for the Royal Fleet Auxiliary over10 years, news of plans to axe about 40% of the workforce (290 jobs) by the end of March 2019, was given to union representatives and workers today (11th October).
The Unite union is demanding that Cammell Laird sets out the business case for cuts which will see the loss of vital skills and ‘backdoor casualisation’ of the workforce. It fears that the proposed job losses will undermine the shipyard’s ability to fulfil new contracts.
Unite’s assistant general secretary for shipbuilding, Steve Turner, said: “The loss of jobs at Cammell Laird would see skills gone for a generation and be a further blow to the UK’s shipbuilding industry . . . it is clear that the government must and can do more to support UK shipbuilding jobs. This must include the government stepping in and supporting the retention of skills and jobs while shipyards like Cammell Laird wait for new contracts to come on stream”.
Instead of ‘offshoring’, the government should be handing contracts to build the Royal Navy’s new fleet solid support vessels and a £1.25bn contract for Type 31e frigates (maritime security-focused platforms) to UK shipyards, using British made steel as part of an industrial strategy that supports jobs and communities across our four nations.
Yesterday it was reported that MPs had urged civil servants (defence officials) to pick a UK company for the £1billion contract for three Fleet Solid Support vessels for the Royal Fleet Auxiliary. Commons Defence Committee chairman and senior Tory MP Julian Lewis feared that foreign firms subsidised by their governments could undercut British rivals.
Penny-wise, pound foolish?
The MoD’s director general for finance told MPs the department’s biggest concern was “what will deliver the greatest value for money”- meaning the lowest bid – a narrow perspective. But as Labour MP John Spellar pointed out, the Treasury would benefit from tax revenue ploughed into public coffers if the work was carried out in the UK – “a significant return” – which would be multiplied by work given to British steel and component manufacturers.
Steve Turner said that a failure to have these ships made in Britain would be ‘a gross betrayal of UK ship workers and regional economies, putting at risk manufacturing skills vital to our country’.
New Fleet Solid Support ships: cash-strapped MoD should look at the total cost-benefit of building in Britain
Jeremy Corbyn is in Glasgow today, where – reversing New Labour policy – he will call for Navy shipbuilding contracts to stay in the UK.
The contract could lead to over 6,500 jobs in the UK, 1,800 of those in shipyards: “Our proposal would both sustain existing shipbuilding and supply chain jobs and create new ones – right here in Scotland and also across the UK.”
The MOD, which is alleged to have ‘lost controls of costs’, hopes for a cheaper option. Its spokesman added: “We are launching a competition for three new Fleet Solid Support ships this year and strongly encourage British yards to take part”.
“Until the new Fleet Solid Support Ships (FSS) arrive, these hardy veterans must stagger on into the mid-2020s”
The three currently supporting ships supply ammunition, food and spares are “antiques built in the late 1970s and saw action in the Falklands War”. Corbyn warns:
“By refusing to help our industry thrive, the Conservatives are continuing their historic trend of hollowing out and closing down British industry. Over the course of the 1980s under the Tories, 75,000 jobs were lost in UK shipyards, leaving just 32,000 remaining.
“Our shipyards used to produce half of all new ships worldwide. Our current market share is now less than half a per cent. The Tories seem hell-bent on accelerating and deepening this industrial decline.”
SNP MSP for Glasgow Anniesland, Bill Kidd, is sceptical, saying: “Workers on the Clyde and people across Scotland haven’t forgotten Labour’s betrayal of the industry in 2014.
Seven years ago, the Stirrer’s correspondent (The Spook) predicted that one day the powers that be will realise that services should be designed and managed by the ‘undoubted experts’ that exist within the council.
S/he explained that they would be more practical and less expensive than those designed by “by cavalier consultants and back room HR boffins who have no conception of delivering a service and are only concerned that “procedures” are followed and “statistics” are recorded, irrespective of how impractical and resource wasting this might be.
Yesterday the Financial Times predicted that Learndirect, a company owned by the private equity arm of Lloyds Bank, is at risk of collapse, following a report by Ofsted. This prompted a data search which revealed 2013-4 as vintage years for complaints about the performance and cost of outsourcing companies.
Last year a survey of 36 strategic public-private partnerships signed between 2000 and 2007 found that 13 of the contracts – ranging from 7 to 15 years and covering IT, back-office functions, property management and highways – have gone back in-house at the end of contract or as a result of early terminations. In more than a third of cases, councils found that delivering services in-house could save more than outsourcing to commercial companies in long-term, multi-service partnerships. A return to designing, staffing and over-seeing services in-house can improve performance, reduce costs and provide stable employment for local people at all levels, with money circulating in the area, instead of going to distant shareholders.
The New Statesman noted that many companies featured on their list of nine spectacular’ council outsourcing failures were said to be looking “excitedly” at the NHS – hoping for “heaps of public money, ditching service the second the contract is framed and delivering huge returns to their shareholders”. Its 2014 article opened:
“One of the many concepts that free marketeers refuse to abandon in the face of all evidence is the idea that the private sector is better at providing public services than the public sector. Private companies have been cashing in on this fable for years at council and government level. As we file this report, another glorious outsourcing triumph is breaking: the Ministry of Justice has asked police to investigate alleged fraudulent behaviour by Serco staff in its Prisoner Escort and Custodial Services contract”. An online search will reveal that this is one of many problems reported in different countries.
Punitive contract ‘get out’ clauses – real or imagined
The article also listed the amount councils have had to spend to get out of private sector contracts and/or to deal with contract disputes and cost overruns. Note Javelin Park – the Gloucester incinerator contract revelation.
Despite these concerns, four years ago Swindon council brought basic ‘commercial’ services such as waste collection, recycling, highways maintenance and grass cutting, back in-house in order to save an estimated £1.8m. Last year, because of performance problems, financial pressures and NHS policy shifts, Swindon also decided not to renew contract with social work provider SEQOL.
Birmingham City Council recently ended the Service Birmingham Joint Venture with Capita which provided the Council’s information technology, ran the council tax and business rates administration service. The process continues with its move to bring waste and recycling collection in-house.
With reference to Serco, G4S and others – Simon Chesterton goes deeper, beyond issues of cost and efficiency:
He asks (left) whether there should be any limits on government capacity to outsource traditionally “public” functions:
“Can and should a government put out to private tender the fulfilment of military, intelligence, and prison services?
Can and should it transfer control of utilities essential to life, such as the supply of water?”
Bloomberg reports that thirteen energy, transport and industrial companies are forming a hydrogen council to consult policy makers and highlight its benefits to the public as the world seeks to switch from dirtier energy sources, according to a joint statement issued on January 17th from the World Economic Forum in Davos, Switzerland.
Council members Toyota Motor Corporation, BMW AG, Daimler AG, Honda Motor Co., Hyundai Motor Co., gas companies Air Liquide SA and Linde AG, miner Anglo American Plc, electric utility Engie SA, rail company Alstom SA and motorcycle and heavy equipment manufacturer Kawasaki Heavy Industries Ltd plan to invest a combined 10 billion euros ($10.7 billion) in hydrogen-related products within five years.
John Lippert, the author of the report, quotes Shell CEO Ben Van Beurden: “The world of energy is transforming very, very fast. Hydrogen has massive potential.”
Rather than using batteries to reduce pollution from cars, homes and utilities that are contributing to climate change, fuel cell vehicles are a cornerstone of Toyota’s plan to rid 90% of carbon dioxide emissions from its vehicles by 2050. It believes that it’s easier to convince consumers to use gasoline-electric hybrids and fuel cell vehicles rather than battery-electric autos, which tend to have less driving range and take longer to recharge than filling up with gasoline or hydrogen.
Takeshi Uchiyamada, Toyota’s chairman and a council co-chair, said “In addition to transportation, hydrogen has the potential to support our transition to a low-carbon society across multiple industries and the entire value chain”.
There are also pilot projects in hydrail and hydrogen-fuelled boats and barges – see in March 2016: Birmingham planners and engineers focus on clean transport.
Now thrive the armourers: unrepentant ‘special friends’, Britain, Saudi Arabia and the United States
Though cluster bombs were banned under international law in 2008, Amnesty International has found a UK-manufactured cluster bomb in Yemen and, according to Defense News, the United States has sold Riyadh cluster bombs and millions of dollars’ worth of training, information gathering, weapons and aerial refuelling support to the Saudi-led coalition fighting in Yemen.
The International Business Times reports that for over a year, Human Rights Watch has recorded attacks on Yemen by the Saudi Arabia-led coalition, killing civilians and destroying homes, schools and hospitals. They have used cluster bombs, which scatter explosive ‘bomblets’ across a wide area and eject a stream of molten metal designed to pierce metal armour as they detonate. After this, they explode into thousands of fragments killing and maiming all in the vicinity. If they don’t explode on impact, they become a danger to civilians on the ground. More on the technology here.
Amnesty International calls on the British government, which has rejected claims that the Saudi Arabian-led coalition has violated the laws of war during its conflict in Yemen:
- to stop the UK selling arms to the Saudi Arabia-led coalition that could be used in the Yemen conflict;
- to launch an immediate inquiry into how UK cluster bombs ended up in Yemen and
- to ensure the Saudi Arabia-led coalition destroys all remaining stocks of UK cluster munitions.
Has the Obama administration blocked sales of cluster bombs to Saudi Arabia?
A few days later, Defense News and many other media outlets reported that the Obama administration has moved to block sales of cluster bombs to Saudi Arabia for use in Yemen, amid reports of mounting civilian casualties there. However no link was given and a search for the report in the named journal Foreign Policy found no reference on its site.
(Update, reader Felicity Arbuthnot found a link in another sticle: http://foreignpolicy.com/2016/05/27/exclusive-white-house-blocks-transfer-of-cluster-bombs-to-saudi-arabia – subscription only).
This move is said to follow rising criticism by U.S. lawmakers of America’s support for Saudi Arabia’s role in the year-long Yemeni conflict – not because of concern about the civilian casualties and infrastructure damage inflicted, but, it is alleged, due to increasing disappointment at the Saudis’ failure to do more to fight the militants of the Islamic State group in Syria, Yemen and elsewhere.