Page 65 - The Economist Asia January 2018

The Economist January 27th 2018
Bagehot The Midlands engine Britain 49

Westminstermaybe brain-dead but some parts ofBritain are buzzing with ideas
More recently, ithasencouraged the idea thatthe country’sfuture
lies in finance and other services. In 1980 Warwick attracted an
academic-entrepreneur, KumarBhattacharyya, who thought this
was nonsense and set about turning Warwick into one of the
world’s leading centres for research in manufacturing. The War-
wick Manufacturing Group is now an ever-expanding set of
buildings housingcutting-edge research into smart cars, 3D print-
ing, robotics, materials science, biomedicine, cyber-security and
much else. It gets 95% ofits fundingfrom industry.
The focus on practical knowledge allows reform-centrism to
deal with three bigproblems. The firstisBritain’slackofinclusive
growth. Lord Bhattacharyya helped to persuade Tata to buy an
ailing Jaguar Land Rover from Ford in 2008. JLR is now Britain’s
largest carmaker, accounting for 30% of production. Warwick of-
fers apprenticeships that allow students to earn degrees while
workingforlocal firms. The second isproductivitygrowth, which
has been disappointing for decades and flat since 2008. Warwick
works with 1,000 world-class companies and advises more than
1,800 small and medium-sized ones. The third is regional imbal-
ance. StuartCroft, the vice-chancellor, talksaboutthe importance
of“place-making”—that is, building on the region’s strengths and
HE Palace ofWestminsterisone ofthe mostdepressing places tackling its weaknesses. He argues that Mr Street’s arrival as
Ton Earth at the moment. The only people in a good mood are mayor has turbocharged place-making. The West Midlands has
swivel-eyed Brexiteers and fever-brained neo-Marxists. Every- long suffered from regional fragmentation and political rivalry.
body else is miserable: frustrated by the intellectual vacuum at MrStreet, a Tory mayoron Labourturf, is an “extremely energetic
the heart of the government and worried that Britain may be symbol ofcollaboration”.
drifting to disaster. Michael Heseltine, a Tory grandee, laments Warwick is not alone. Dozens of universities across the coun-
that “we have effectively no government”. Nicholas Boles, a for- try have forged close relations with business. Sheffield Universi-
merminister, says that Theresa May “constantly disappoints”. ty’sAdvanced ManufacturingResearch Centre is pioneeringnew
The reason for the depression is the failure of centrist politi- ways of3D printingand buildingmodularnuclearreactors. Man-
cians to answer the questions posed by the two great wake-up chester University is beginning to feel like a British version of
calls of the past decade. The financial crisis demonstrated that MIT, with itsindustry-focused institutesand business-sponsored
Britain was dangerously dependent on a single, volatile industry. research programmes. The University of Surrey has a space cen-
Brexitproved thatmillionsofpeople feltthatthe country wasnot tre. The West Midlands is one of six areas that acquired mayors
working for them. Mrs May has shown signs that she has heard last May, includingits erstwhile rival, GreaterManchester.
the alarms, talking about launching a “modern industrial strat-
egy”, helping the “just-about-managing” and spanking snout-in- Made in the Midlands, wasted in Westminster
the-trough bosses. But she has failed to turn words into deeds. These research centres have driven a striking manufacturing re-
The comfortisthatthere ismore to the countrythan Westmin- vival. Britain recently saw its longest sustained growth in manu-
ster. Bagehot recently escaped from London to visit the Universi- facturingoutput since 1994. It is also a world leaderin niches such
ty of Warwick and discovered a world that is every bit as pro- as satellites, drones, aeroplane wings and racing cars. More For-
blem-solving as Westminster is problem-bogged. Builders are mula One teams are based there than anywhere else. Success in
hard at work on a vast National Automotive Innovation Centre manufacturing is no longer a matter of economies of scale and
which is due to open later this year. The wider region is also en- cheap labour. Instead it relies on things that play to Britain’s ad-
joying a revival. In May the West Midlands acquired its first elect- vantages: bright ideas, cleverdesign and rapid customisation.
ed mayor, Andy Street. Coventry has just won a national compe- There is only one problem. However hard you try, in an over-
tition to succeed Hull as Britain’s city ofculture. centralised country you cannot get away from Westminster poli-
But this slice of Middle Britain offers more than just a collec- tics. Brexit, a policy that started life as the hobby-horse of a Tory
tion ofnewbuildingsand initiatives. Itoffersthe outline ofa new clique, could be the biggest shockto manufacturing since the sec-
governing philosophy. This philosophy is centrist in the sense ond world war, disrupting supply chains, ruining just-in-time de-
that it tries to build on the best ideas of the past 40 years, such as liveries, forcingcompanies such as JLR to thinkagain about being
recognising the creative power of business. But it is reformist in based in Britain, and, on top of all that, making it harder for uni-
that it accepts that the old model put too much emphasis on Lon- versities to attract world-class academics. In launching his criti-
don and finance, and forgot about making growth inclusive. Call cisms of Mrs May’s do-nothing government, Mr Boles borrowed
it reform-centrism. one ofGeorge Orwell’s more obscure phrases about “boiled rab-
Reform-centrism’s starting-point is to build links between the bits”, who lack both courage and convictions. Another Orwell
knowledge economy and ordinary firms. Britain has an old prej- phrase is perhaps even more apposite: that Britain resembles
udice against linking high minds with low deeds like making nothingso much as a “ratherstuffy Victorian family”, where “the
things. That prejudice used to be expressed in its preference for young are generally thwarted” and “most of the power is in the
training its ruling class in subjects such as classics and history. hands ofirresponsible uncles and bedridden aunts”. 7