Monday 28th August 2017
Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy and Labour Party Parliamentary Candidate for Salford and Eccles
What do we mean by the Industrial Revolution? David Landes defined the Industrial Revolution, in his classic account of its origins and history, The Unbound Prometheus, as continuous technological change.
In particular, he highlighted three important aspects to this change: the substitution of mechanical devices for human skills; the use of inanimate power rather than that of human or animal; and improvements in the getting and working of materials. But, rather than the one-off and infrequent technological innovations of the past, technological change was sustained. Indeed, it continues to this day.
The technological change has allowed productivity and thus living standards to increase across vast regions of the earth over the last 200 years. The Industrial Revolution has transformed, and continues to transform, our world.
Some, including Landes, have regarded the technology as coming in clusters, to which the terms first, second, third and, perhaps, fourth industrial revolution have been attached. Each new wave of technologies would filter through the economic system bringing about improvements in productivity.
The first of those technological changes, however, has its origins in late eighteenth century Britain. It was there, in factories such as Albion Mill, in Southwark, that Boulton and Watt, in 1784, invested in the first large scale steam-powered factory, and in Arkwright’s Mill, in Cromford, that the famous waterframe was installed in the 1770s.
The dramatic changes taking place were not lost on contemporaries. Patrick Colquhoun in 1815 remarked that: “It is impossible to contemplate the progress of manufactures in Great Britain within the last thirty years without wonder and astonishment. Its rapidity…exceeds all credibility. The improvement of steam engines…the woolen and cotton manufactories by ingenious machinery, invigorated by capital and skill, are beyond all calculation.”
If the Industrial Revolution is the process of continuous technological improvement, how will Britain’s exit from the European Union affect it? Whilst the process of continuous technological change is unlikely to stop, it may well be hampered by a mishandling of Brexit.
Firstly, Brexit throws up risks to investors and threatens investment. Investment is the way in which new technology is put into our economy.
As such, it is of vital importance to technological change that productivity increases. Investment in R&D is also the way in which new technologies are invented in the first place. Britain’s record on investment is already poor in relation to our counterparts. In 2015, as a proportion of GDP, we invested about 17.6 per cent compared to 19.2 per cent in Germany, 20.3 per cent in the United States and 22.3 per cent in France. We should not compound that further so we urgently require an industrial strategy which seeks to encourage capital formation.
Secondly, a bad Brexit threatens trade. We need to ensure that we reach a trade deal with the EU which is tariff and impediment free. Access to the EU market is vital for the state of our economy and industry, as the EU provides a hugely important export market for goods and services. Furthermore, modern supply chains often criss-cross borders. UK regions outside of London are anything from 50 per cent to 100 per cent more dependent upon EU trade than with London. A bad Brexit thus undermines the industries of the very regions, the North and Midlands, which witnessed the birth of the Industrial Revolution.
It is absolutely imperative to reach a good trade deal and develop an industrial strategy which helps support investment. Labour’s six Brexit tests are intended to act as a bench mark to ensure just that, and Labour’s industrial strategy will tackle the barriers that private and public investors face in championing and growing great British industries.
That is why we intend to ensure real collaboration between private investment and capital expenditure and why we hope to encourage private investment through our national investment bank.
In that way, we can ensure Britain’s role at the forefront of the Industrial Revolution is not just a historic one.