The Government’s reindustrialising Britain rhetoric risks becoming the new ‘levelling up’ - Andrew Vine

Remember levelling up? The promise that Yorkshire and the wider north were going to get the fairer economic deal we’d deserved and demanded for decades? Many in Yorkshire will recall the term with a humourless laugh. Some might even point to it as a textbook example of how governments let voters down.

There was lots of fanfare across many years, lots of warm words but virtually nothing of any substance to create new jobs and prosperity for the north, or brighter prospects for our young people.

Levelling up became shorthand for broken government promises and ultimately an embarrassment, quietly dropped by the Conservatives who had coined the term and buried by Labour when it won power two years ago. It has made a brief comeback in the last couple of weeks – but for all the wrong reasons.

The manufacturers’ trade body, Make UK, warned that the government’s much-vaunted aim of reindustrialising Britain risks becoming the new levelling up, which we can take to mean that a laudable intention won’t achieve anything unless there is action to back it up and policies to support business.

It is fair to say that a majority of us in Yorkshire were pleased to hear that one of Andy Burnham’s key intentions is to boost British industry, just as we had been glad about the Conservative aim to rebalance the economy by closing the historic north-south divide that starves us of investment.

We’ve always been a hard-working county, and our attachment to industry is rooted in a long and rich heritage. And our industrial base is still something to be proud of, as well as being one of Yorkshire’s greatest economic strengths.

But we need more of it, not least in the areas which have never really recovered from the loss or decline of the traditional heavy industries that sustained Yorkshire for so long, including coal, steel and engineering, despite the welcome rise of new high-tech businesses and green manufacturing.

The scars left by the old industries have largely disappeared from Yorkshire’s landscape, but the void they left behind is still all too apparent in run-down communities, high levels of deprivation and a dearth of well-paid, secure jobs.

Whether we are going to get the industrial boost Mr Burnham aims for is far from certain, because the signs are that things might be going in the opposite direction. Make UK could well be right in predicting reindustrialisation is heading into the same dead-end as levelling up.

We can look to Hull for proof of that, where the chemicals giant Ineos has paused production at three of its plants, directly affecting 1,000 staff. If the shutdowns continue, it will probably hit more people in the company’s supply chain.

The company’s boss, Sir Jim Ratcliffe, one of Britain’s most successful and dynamic business leaders, has cited spiralling energy costs for mothballing the plants.

Ineos is paying 12 times more for gas than its rivals in the United States and eight times more than competitors in China. A year before, the company cut a fifth of its workforce, again blaming energy prices.

The government had very little to say about the shutdowns, despite the consternation that greeted them in Hull and the rest of Yorkshire.

You don’t need to be a businessman of the calibre of Sir Jim to point out that if the government was on the right lines about reindustrialisation, we wouldn’t be seeing highly efficient and previously profitable manufacturing plants being closed.

And if a company as big and successful as Ineos is experiencing difficulties, how many more with much slimmer profit margins are struggling against headwinds over which they have no control?

There is little in the government’s rhetoric about reindustrialisation that provides reassurance for those at the sharp end of business.

It has been a justified criticism of Labour since it took office that there is a lack of understanding and experience in its senior ranks about the realities of running companies. We have yet to see if Mr Burnham’s frequently cited success as mayor of Manchester in partnering with the private sector changes that.

Rather than creating an environment in which business – and expanding industries – can thrive, the government stands accused of putting obstacles in their way.

Business leaders have been almost unanimous in complaining that higher national insurance rates for employers have deterred them from taking on new staff. Hikes in business rates and the minimum wage have also hampered growth. Constantly increasing energy prices only add to the problems.

This is not an agenda for reindustrialisation, and unless there is radical action in next month’s budget to make life easier for business, we are more likely to see companies acting like Ineos than expanding.