In his infamously grim speech in the Downing Street garden, Keir Starmer said that government has to be “honest with people – about the choices we face. And How tough this will be.” Starmer presents himself as a man who is being brutally honest with the British public, not lying about the scale of the challenges. But as so often with politicians, the more they insist they are being honest, the bigger the lie they are trying to sell you.

Starmer says that he is making tough choices, but he is failing to present them as choices at all. As he goes on to say in his speech “We have no other choice given the situation that we’re in.” It’s like a magic trick, it’s misdirection. Tough choices, hard choices, we must make choices, we have no choice. Stop. Freeze the cards. Look — there one vanishes up Starmer’s sleeve. Choice, choice, choice, no choice. He’s telling you the government is making choices, then telling you that there are no choices to be made at all. 

A major UK employer going bust, and the government is letting it happen

But there are choices. Every penny the government spends or cuts is a political choice. What Labour is doing is making choices for you, but by presenting them as a fait acompli, they are trying to convince you that those decisions are driven by pure, apolitical necessity. So rather than presenting the options to us in a general election, or even opening up the question for national or parliamentary debate, they are going into a back room and deciding the country’s fate without scrutiny or challenge. 

What kind of “tough” decisions is Labour making? Well, Sir Keir Starmer decided not to loan shipbuilder Harland and Wolff £200 million back in July. The result of which is that the company has now declared insolvency. Harland and Wolff was founded 163 years ago, employs 1,500 highly skilled workers, and built everything from the Titanic to much of the Royal Navy, forming a crucial component of British industrial and military might. To call this an historic and strategic asset scarcely covers it, and its loss will leave a serious gap in our naval capacity. 

The company’s Belfast dock is one of the few remaining viable drydocks for our new Queen Elizabeth Class aircraft carriers, and its loss would leave us dependent on Rosyth alone, which carries risks of “delay or even damage” when repairing the vessels. Estimates for building an alternative drydock site, such as a proposed one in Portsmouth, are as high as £500 million, already many times what Harland and Wolff is asking for. Moreover the company is currently trying to fulfil a £1.6bn contract to build three new warships, the future of which is now imperilled, along with the efficacy of our remaining fleets. 

Perhaps, just as with means testing the Winter Fuel Allowance (saving a potential £1.4bn a year) this is just the brutal reality of a government not having the money to spend. But even if we accepted this embrace of Osbornite economics (and you will note that 14 years on from austerity we are still apparently out of cash), we should nevertheless look at exactly what the government is choosing to spend money on. There are the pay deals for public sector workers, who will be receiving above inflation pay rises expected to cost up to £10bn. Perhaps these were necessary to get people back to work, though it’s striking that Labour has extracted no concessions in return, and intends to pass legislation making it easier for workers to strike. But what about the £11.6bn Labour is continuing to send overseas as “climate aid”, coming out of an overall overseas aid spending of £13bn a year (money that simply vanishes from the UK rather than being lent or invested)? Means testing the Winter Fuel Allowance is a fraction of these sums. The rejected Harland and Wolff loan (yes loan, not government giveaway) would have been a rounding error. 

Labour continually asserted, leading up to the election, that they would be focusing on growth. But here is a major UK employer going bust, and the government is letting it happen. Nor is it likely to be the only British manufacturer in trouble over the coming years. The ZEM (Zero Emission Mandate) prescribes that a certain portion of car sales are electric vehicles, starting at 22 per cent of sales in 2024 and rising to 80 per cent in 2030 and 100 per cent in 2035. This mandate is not only stricter than the EU’s, putting UK factories at a relative disadvantage, but has also massively distorted the market. Manufacturers are rationing the delivery of petrol vehicles to meet government targets and avoid fines, but this is obviously unsustainable. As of 2019, 3 per cent of all UK jobs were linked to the automotive sector, and nearly 200,000 people are directly employed in making cars. Leaders in the industry have warned that manufacturers could go bankrupt due to quotas that are well in advance of organic demand for electric cars, and the infrastructure to support millions more EVs is behind schedule. The biggest beneficiaries of British and EU quotas are likely to be not their domestic car makers, but China’s heavily subsidised electric car industry, which currently accounts for over half of electric cars produced worldwide. 

Energy costs in general are going to go up, with gas and electricity prices rising by 10 per cent from October. Labour’s pledge to halt oil and gas exploration in the North Sea will almost certainly increase costs further and Scotland’s only oil refinery is closing next year, costing 400 jobs, with its owners citing competition from overseas, and the ZEM policy reducing domestic demand. 

Labour has previously asserted that the shift to a green economy will produce new, innovative industries, but the promised carrot of an investment of £28bn in green industries has been indefinitely delayed (and recall that Labour is still committed to sending billions overseas to fuel other countries’ green new deals), whilst the stick of punitive environmental measures is arriving on schedule. Nuclear power could solve many of our energy problems long term, but require time, scale and investment, and in this area like so many, we are reliant on overseas partners. 

Certain industries are saved at all costs, and others left to sink

British manufacturing presently makes up 23 per cent of GDP, but its benefits to society, and the negative impact of its replacement by other sectors, is far more profound than the loss of some picturesque smoke stacks. The median wage in the manufacturing sector is 11 per cent higher than in the wider economy. Even more striking, nearly half of business R&D comes from manufacturing. In other words, despite all the claims made for the modernity of the “knowledge economy”, it is manufacturing that is still the most innovative part of our economy. Losing what remains of it means lower wages for workers, and a slower pace of technological advancement. And as we have seen in the context of the pandemic and the Russian invasion of Ukraine, the loss of domestic supply chains is a strategic threat to the UK, one that can cost lives and imperil our national security. 

So why, when the industry comes knocking to warn of the catastrophe of EV quotas, or asking for a loan to keep afloat, does the government slam the door in its face? Why, when Labour makes the “tough choices” are industrial workers so often the ones paying the price?

The Ockham’s Razor of politics is that the most brutally cynical explanation is generally the right one. In the 2015-17 parliament, an LSE study found that though nearly half of the country’s graduates have a degree in a STEM (Science, Technology, Engineering and Mathematics) subject, only 17 per cent of MPs did. A 2014 report revealed that the majority of MPs don’t understand basic economic questions such as how money is produced in the economy, and a 2012 survey showed that a majority of MPs were unable to understand equally simple questions about mathematics. In the 2019 parliament, over a third of MPs had studied either Politics, Law or English as undergraduates. 

The average MP doesn’t know much about that 23 per cent of our economy that is based in science and technology, and doesn’t know many people who work in it. But they are surrounded by people who have links to the public and service sectors. 

Thus certain industries are saved at all costs, and others left to sink. British universities, long subsidised by the publicly backed debt bondage of half of the nation’s young people, are now struggling, thanks to years of excessive expansion fueled by international students. Calls to “save” the sector at any cost are extremely loud, and likely to fall on willing ears. 

The banking sector, which catastrophically failed in 2008, was certainly not allowed to fail. Gordon Brown found £137 billion to save the banks, and later boasted he had “saved the world” in doing so. And that’s not all. Through QE, in which the state prints money to buy back government bonds from the banks, our financial sector has received over £895 billion since 2009. According to an NEF report our current monetary policy sees excessive interest rates paid by the government to commercial banks, meaning that as much as £55 billion a year could be saved simply by adopting banking practices already used by the EU, Switzerland and China. And whilst all of this money pours passively into our financial sector, Starmer can’t find the spare change down the back of the Treasury sofa to save one of our most strategically vital manufacturers

There are of course good and credible reasons for supporting our financial sector, just as there are for moving to a a Net Zero economy, but these policies, and the pace and manner in which they are implemented, are choices that are never discussed or debated by either the Tories or Labour, both of whom have presented their policies to the public as foregone conclusions, determined by the whims of blind fate. 

Britain is headed for an economic iceberg every bit as fatal as the one that sank the Titanic

British manufacturing has flatlined since 2008, and it’s not because of some innate national uselessness. There are any number of weaknesses in the UK economy, from crumbling infrastructure, to high energy costs to poor management and planning. But a big part of the story is that the government simply doesn’t back British industry. We’re currently relying on EDF, a French company, to rebuild our nuclear industry. The company, already state-owned, became 100 per cent nationalised in 2022, and is directly subsidised and managed by the French government. Spain’s shipbuilding industry, predicted to take over the Royal Navy contract should Harland and Wolff collapse, was recently the recipient of a £44 million subsidy by the Spanish government. And if our car manufacturers fail to fulfil the ZEM, China’s EV industry, subsidised to the tune of £175 billion, is waiting in the wings. 

Certain things are never allowed to fail or collapse in Britain, whether they be universities, banks or house prices, even when such a crash might provide the impetus for necessary change and reform. Why? Because those who dominate our establishment are heavily invested in these institutions. They are “too bourgeois to fail”. But other things — factories, shipyards and real wages — can be allowed to fall off a cliff, even when the consequences are catastrophic for the public interest. All sorts of covert help and subsidy is available, or loopholes exploitable, if you’re running a hedge fund, or speculating on property, but a great deal less if you’re trying to build and make things in the UK. 

Other governments are treating manufacturing, especially in strategic sectors, as a life and death issue; a ferocious competition for economic dominance. They are pouring billions into making such industries a success. In the case of China, the one-party state is using a command economy to flood global markets with cheap goods in a conscious attempt to collapse the manufacturing capacity of competitors, and seize a greater share of global output. In this global struggle, even more fundamental than manufacturing alone, is the secure supply of food, raw materials and energy upon which national survival, let alone growth, depends. 

At the moment Britain is headed for an economic iceberg every bit as fatal as the one that sank the Titanic, driven on its suicidal course by a series of mistaken, short-termist choices and assumptions. Labour is pursuing a kind of “green austerity” in which decarbonisation continues to be driven by deindustrialisation and offshoring, rather than green innovation and growth. The result will be an economy at the mercy of global rivals, with a collapsing public sector, declining wage and productivity growth, and a volatile domestic market in energy, food and other commodities. For now, there’s still time for Starmer to turn the ship around. It’s time Britain treated manufacturing as the existential issue it is, and it’s time we make the “tough choice” to help British industry at the expense of rentier capitalism. Before it’s too late.