If it is not about picking winners, then nor should industrial strategy be about creating losers. The past few weeks have been a great advertisement for why cabinet government should be scrapped. Theresa May gets away to the Alpine lakes and in the space of days the carefully uncrafted industrial strategy has short-circuited around electrification and ministers look like they want to finish holing out British manufacturing.
On the one hand, there is the fiasco of Michael Gove and the environment secretary’s 2040 ban on all petrol and diesel engines. No one had bothered to tell the transport department, while the business department had no answer as to what this means for 180,000 jobs in UK automotive manufacturing.
Yet Mr Gove’s embrace of the electron came just as Chris Grayling at transport was deciding that electrification on the railways is not all it’s cracked up to be, that all those stanchions and wires are all rather ugly and that long-promised projects won’t happen after all.
While this lets Network Rail off the hook for being late and overbudget on a load of new schemes, Mr Grayling has also delivered an unintended industrial consequence. Bombardier’s Litchurch Lane plant in Derby is the last vestige of Britain’s trainbuilding heritage. Five years ago, having nearly closed the site, Bombardier took a look at the government’s plans to electrify the railways and decided to quit making dirty diesel Turbostars. Instead, it started developing electric trains, the result of which is the Aventra, the most efficient train on the British network when it starts shuttling on London’s Crossrail. Now, under Mr Grayling’s U-turn, if Bombardier is to stay in the game it must develop new bimodal technology — hybrid diesel-electric trains.
The irony is that one of the long-promised electrified lines that Mr Grayling has junked is the midland mainline linking the great manufacturing centre of Derby with London. Experts reckon that 80 per cent of the route is relatively simple to electrify. The remainder could be in-filled in the future, or the issue could be overtaken by the advent of smarter electric units.
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The least we can expect of industrial strategy is coherent, consistent policy. No one expects the government to get it completely right. But they do not expect it to get it completely wrong, either.
. . . is also on the roads
More than one in twenty new cars in Britain is now hybrid or full electric. That is a watershed moment on the roads.
A lesser-known stat is that one in 15 cars (about 6.5 per cent) rolling off British assembly lines is hybrid or electric, getting on for 100,000 Auris hybrids from the Toyota plant near Derby and more than 25,000 electric Nissan Leafs in Sunderland. That puts British car manufacturing ahead of the vehicle-buying curve, a position it should retain when BMW’s Cowley factory starts assembling the long-awaited Mini E, a battery vehicle that could be wildly successful, emitting British cool whilst saving the planet.
But that is not to say that UK automotive is ahead of the game. While Britain assembles about 1.7 million cars a year, it also produces 2.5 million engines. That is a manufacturing base that disappears under Mr Gove’s clean air plans. There are few plans for electric motor-battery-powertrain production to come to Britain. We need BMW to move manufacturing of the valuable guts of the Mini E from Bavaria to the Midlands and Tesla’s Elon Musk to open one of his gigafactories in the UK. That neither of those things will happen means that Britain becoming an electric-only car market could just about kill off a domestic manufacturing industry that survived even Margaret Thatcher.
Unhealthy situation
We all know a few corporate leaders whose personality traits make you wonder whether they haven’t got a medical condition. The case of Bob Mackenzie, removed last week as the executive chairman of the AA, raises several issues. The company cited gross misconduct. Word is he lashed out at a senior colleague. His family says he is mentally ill.
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Mr Mackenzie has a reputation: one person’s assertiveness is another’s belligerence, and to another it’s bullying. If his leadership has been volatile, then how has the board been dealing with it? What processes are there on any board to rein-in erratic leadership? At the AA, the situation has been even more acute: Mr Mackenzie has been running the board as well as the company, once more posing questions about the executive chairman role at any plc.
Mental health is a serious issue that in public life is now taken far more seriously. This is a case in which, for the integrity of the company’s corporate governance as well as that of the counterclaim, a great deal more openness is needed.
Digging deeper
From swampy eco-warriors to engineer shortages, there are 101 ways that High Speed Two could be delayed. Make that 102. Our man in the trenches says a shortage of British archaeologists could throw a trowel in the works. There will be scores if not hundreds of archaeological sites on the route. Relying on inexperienced scratchers and scrapers will bring delays, as will bringing more in from Spain and Portugal, our source of diggers. All this when the government is creating even more digs around the country with its greenfield housing boom. Archaeologists, it is said, will date anything. HS2 could be very dated by the time it is finished.