It’s a fascinating weekend in the media, which point to a number of ideologies coming home to roost.
The closure of UK’s Iron and Steel making is making lots of headlines as per this piece:
As the article says, the Tories ‘religious belief in freemarkets’ lies behind our failure in key industries like steel and is reducing opportunities in new emerging green industries.
I’ve long believed that free markets only work if the whole world practices free markets (and that has never been the case and is even less so right now). I have personally come up against this blind free markets religion many times when advising this Government on Industrial Strategy from Sajid Javid, to Andrea Leadsom and of course Kwasi Kwarteng who ultimately killed our Industrial Strategy, before moving on to implementing the low tax part of this ideology, that didn’t work particularly well either.
The fascinating thing is that Government often ends up being forced to intervene in markets (especially in recent tough times). Indeed, they threw £500m at Tata Steel to resolve this problem. But because this Government is ideologically opposed to such interventions, they are badly thought through and always too late. We made similar poor interventions in the 1970’s, throwing money at individual companies like British Leyland.
The much smarter approach is to have a strategy for these interventions, which are whole sector based, rather than digging individual companies out of trouble when it’s too late. I call it a smart, modern Industrial Strategy, and maybe this is coming back into fashion!
The second topic being debated is UK’s lowering environmental standards, as per:
The article points to Brexit meaning that the UK is “falling behind the EU on almost every area of green regulation” from dirtier water and air, to more pesticides and dangerous chemicals.
Apart from the obvious problem of wanting high environmental standards (as we were promised), there is a significant problem looming. As these standards diverge, there is a very high chance some UK products will be banned from export to the EU and others may be charged with export tariffs.
The good news is that there is an answer; dynamic alignment with EU standards and ultimately rejoining the Single Market. Could we finally be heading towards having an honest debate about this?
Finally, it is very heartening to see Germany waking up to their right wing populism before it is too late as per:
It seems, from the mood this weekend that we are waking up to the populist lies of the recent past also, or am I being too optimistic?