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Nations Choose Prosperity: Why Britain Needs an Industrial Policy [Paperback]

Ruth Lea (Editor) , Ruth Lea

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Book Description

29 Jun 2009
After years of being seen as outmoded, industrial policy is back on the political agenda, this time renamed 'industrial activism'. There is a widespread concern, fuelled by the crisis in the financial sector, that we have been too complacent about the decline in UK manufacturing, assuming that service industries would guarantee continuing prosperity with or without a vibrant manufacturing base. The shift against manufacturing in Britain's economy has been dramatic. Manufacturing accounted for over 30 per cent of Gross Value Added (GVA) in 1970, but by 2007 it accounted for less than 13 per cent; whilst services made up just over half the economy in 1970 but now represent around three-quarters of economic activity. This has had a serious impact on the balance of payments, as import growth has outstripped export growth. In 1997 the current account was almost in balance. A modest deficit in visible trade (goods) of GBP12.3bn was almost totally offset by healthy surpluses on services and in investment income. But by 2008 the visible trade (goods) deficit had soared to nearly GBP93bn. Nevertheless, the idea that 'we don't make anything now' is false. Manufacturing industry remains a very major contributor to the British economy. It represents nearly 13 per cent of GDP, 75 per cent of business research and development (R&D), half of UK exports and 10 per cent of total employment. Britain is the sixth largest manufacturing nation in the world after the USA, China, Japan, Germany and Italy, larger than France. The manufacturing sector is still over one-and-a-half times larger than the financial sector. The contributors to this volume, the first publication of the Civitas Manufacturing Renewal Project, consider the consequences of the decline of manufacturing and how they could be reversed. No one argues for protectionism: free enterprise and competitive markets are vital, and the primary causes of economic prosperity are the talent and energy of the individuals who make up a nation. However, there needs to be a constant effort to ensure that laws, regulations and public policies provide people with the best possible conditions for free enterprise. Certainly low taxes and the avoidance of over-regulation are vital, but positive policies are also needed in transport, ports, energy and monetary policy, public procurement and much more if we are not to fall behind.

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About the Author

Brendan Barber is General Secretary of the TUC, which represents 60 unions with a total membership of around 6.5 million working in all sectors of the economy. After working for an industrial training board for a year he joined the TUC in 1975, becoming Head of the Press Department in 1979 and the Industrial Relations Department in 1987 before being appointed Deputy General Secretary in 1993. He was elected General Secretary in 2003 and has served on a number of public bodies, including the ACAS Council. He is currently a Non Executive Director of the Court of the Bank of England. Ian Brinkley is Director of the Knowledge Economy programme at the Work Foundation. He previously worked at the Trades Union Congress between 1980 and 2006 where he was Head of the Economic and Social Affairs Department from 2004 to 2006 and TUC Chief Economist from 1996 to 2006. He has been a member of the Low Pay Commission, the body that sets the UK's National Minimum Wage (NMW), from 2004 to 2007. He has worked in a wide range of economic and industrial policy and research areas, including economic policy, public spending and public service reform, labour markets, energy and the environment and manufacturing policy, and produced numerous submissions to government and analytical papers. David G. Green is the Director of Civitas. His books include The New Right: The Counter Revolution in Political, Economic and Social Thought, Wheatsheaf, 1987; Reinventing Civil Society, IEA, 1993; Community Without Politics: A Market Approach to Welfare Reform, IEA 1996; Benefit Dependency: How Welfare Undermines Independence, IEA, 1999; We're (Nearly) All Victims Now, Civitas 2006 and Individualists Who Co operate, Civitas 2009. He writes occasionally for newspapers, including in recent years pieces in The Times and The Sunday Times, the Sunday Telegraph and the Daily Telegraph. Ruth Lea is currently Economic Adviser and Director of Arbuthnot Banking Group plc and Director of Global Vision. Her previous jobs include the Director of the Centre for Policy Studies, Head of the Policy Unit at the Institute of Directors and Economics Editor at ITN. She also worked for six years in the City and 16 years in the Civil Service. Ian Fells has been Professor of Energy Conversion at the University of Newcastle since 1975 and has published some 250 papers. He was elected fellow of The Royal Academy of Engineering in 1979 and was elected fellow of The Royal Society of Edinburgh in 1996. He was awarded a CBE in June 2000. Ian Fells was a science advisor to The World Energy Council (1987 to 1998), has been special adviser to The House of Lords Select Committee on The European Community dealing with energy and the environment and the House of Commons select committee for Trade & Industry & Environment. He has been Energy Adviser to the EC and European Parliament and has advised a number of foreign governments on energy policy. In 1993 he was awarded the Michael Faraday medal and prize by the Royal Society. Ian Peters was recently appointed Chief Executive of the Institute of Internal Auditors. He was previously Director of External Affairs at EEF, the manufacturing employers' organisation and has been advising the Department for Business, Enterprise and Regulatory Reform on the establishment of 'Manufacturing Insight', a campaign to promote more positive perceptions of manufacturing among young people. John Philpott is Public Policy Director and Chief Economist at the Chartered Institute of Personnel and Development (CIPD). He has a Doctorate from the University of Oxford and is Visiting Professor of Economics at the University of Hertfordshire. He is a Fellow of the RSA and a member of the Society of Business Economists. Alan Reece retired from teaching and researching in Agricultural Engineering in 1984. Since then he has developed a group of successful enginee

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