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Monday, November 14, 2016

Let’s allow manufacturing find out more by itself

The Scottish Government is keen to gain plaudits from supporting the manufacturing that makes up more than fifty percent of Scotland’s international exports (and that includes exports beyond the EU). Its chosen mechanism is to develop a Manufacturing Action Plan that establishes a new quango – a National Manufacturing Institute for Scotland to “promote continuous innovation, improve productivity and increase investment”. Well, there’s yet more of our tax money gone to people in suits proselytizing about what might be done, but actually creating nothing.

If that makes you weep a little how about this; the action plan for this new quango is embedded in another quango – Scottish Enterprise.

Now get your biggest hankie out because when you read the plan you will be treated to the usual anodyne verbiage that passes for action planning in bureaucratic circles. We need leadership and we need skills, they tell us enthusiastically … and then it all begins to go a bit wrong.

We also need, they say, a circular economy – that’s re-cycling to you and me - a plan for higher overheads. And we need energy efficiency and de-carbonisation – that’s an offer of higher fuel costs and expensive power. And better infrastructure; well maybe, but does that mean raising more public debt that taxpaying firms have to finance.

It goes on; we need more “digitally enabled units of appropriate scale and location” the plan then adds. No, we don’t really know what that means either, but we expect it means that they are making the assumption that if we get better and more widespread internet we will be able to compete. It’s a common assertion, and the consensus among the business support chatterati, but tell the wee foundry in Rutherglen that spending more on broadband will increase their exports and they will probably show you the door.

They want to make Scottish business smarter, and for SMEs to improve their supply chains, adopting new materials and processes. For this, they offer the services of yet another quango, the Scottish Manufacturing Advice Service to assist in enhanced asset reviews (that’s where they tell you that your machines are clapped out and too old; and you say that that’s because you can only just afford to pay the NIC for your workers and the VAT for your sales). They cite “the Vanguard Initiative, an EU policy to help regions unlock their growth potential” as a tool for “leveraging Scotland’s many international relationships”. There is in addition another initiative “Enterprise Europe Network” that will be plugged into this smorgasbord of help.

But who is helping who here through the use of copious amounts of our tax money. There is a very telling sentence in the Scottish Government’s announcement:

“To secure industry buy-in, we need to demonstrate the value gained from a long-term commitment to innovation and technology adoption – particularly within SMEs. Coordinating the national innovation resources and assets appropriate for the manufacturing base will be key to our success”.

Now hold on a minute. If we read this correctly, Scottish Enterprise and its minions are saying that Scottish industry is not really committed to innovation and technology adoption; and, to mend this, their approach will be use coordinated central planning of what we think might mean the universities, other publicly funded research entities and, presumably, themselves. (That’s the people who develop Scotland’s international relations by flying to the Middle East at our expense and staying in very expensive hotels).

In the process, they will add to business overheads by politically correct environmental schemes; while subsidising an army of busy-bodies telling industry what to do. So, what taxpayers face here is its taxes being used by the central state, swimming in a politically favourable (to itself) sea of Euro money, ladled out across its own fleet of highly paid chums and buddies. There is clearly a political back story here to prove also that the EU is vital to Scotland’s future; politics that has no place in industry.

Central planning has never worked – ever – and when the managerial bureaucracy gets into its stride in support of that sort of planning like this, industrial success will simply get further and further away from Scotland’s grasp – at great expense to ordinary taxpayers. It really is time that this sort of 1970’s nonsense was consigned to the dustbin – along with Scottish Enterprise and all its sub-quangos and initiatives.

What manufacturing needs is to be left alone, with much lower payroll and capital taxes to find out on its own what innovation works and what does not work. These quangos work against this process which is solely in the remit of those on the ground doing the innovating.

POSTED BY EBEN WILSON - DIRECTOR, TAXPAYERSCOTLAND 

 





'Government is the great fiction through which everybody endeavours to live at the expense of everybody else.'
Frederic Bastiat