UK Manufacturing looks stronger in August

The UK manufacturing PMI survey rose to 56.0 in August, well above the level of around 52 it was at during 2015 before the Brexit referendum became an issue. Industrial and manufacturing output is up slightly in June 2017 compared to June 2016, confounding the predictions of recession at the time of the vote.

Car output and sales which did extremely well from July 2016 until April this year, were hit by the tax increases of the last budget. However, total car output so far this year is only 1.6% down on the same period last year despite this. In part this reflects the high proportion of vehicles that are exported.

The UK industry runs a £13 bn surplus with the rest of the world and a £21.8bn deficit with the rest of the EU on vehicles. It also runs a £6.2bn a year deficit on components with the rest of the EU and is in balance on parts with the rest of the world. The EU has not been a good or easy market for the UK industry.

Since the vote Nissan has announced two new models for its Sunderland plant and Toyota has pledged a substantial additional investment at its Burnaston facility. Component manufacturers also see the opportunity for more UK sourced parts, with Gestamp announcing a new Midlands manufacturing facility.

Meanwhile Ford has said it will be shedding an additional 1100 jobs from its Bridgend plant. This is in line with its progressive run down of UK vehicle assembly and related work over many years. It closed all vehicle assembly at Dagenham more than a decade ago, and closed its last vehicle assembly line in Southampton before we had in mind a Brexit vote. Transit manufacture for Europe shifted not to the EU but to Turkey. It does intend to carry on making engines in the UK, where UK technology and skills are a strength.

The UK’s two largest vehicle manufacturers are Jaguar Land Rover, producing 544,000 last year and Nissan with 507,000, out of the total production of 1.7 million. Both are committed to their UK base and have scope to buy more components manufactured locally.

The UK government is promoting R and D in new vehicles and new technology, and is backing the Automotive Investment Organisation which seeks new investors to set up component capacity. The aim is to get the UK component proportion up from around 40% to well over 50%.

Boosting the component proportion is an important part of the strategy to generate more jobs here, add more value, and simplify the application of rules of origin for international trade. The motor industry has risen from just 5.4% of UK manufacturing output in 2007 to 9.4% last year.

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98 Comments

  1. Sakara Gold
    Posted September 5, 2017 at 6:05 am | Permalink

    The vehicle assembly plant at Burnaston is a Toyota plant, not Honda
    Honda assemble their vehicles at their plant in Swindon from imported components. Toyota also build their engines in Deeside supporting thousands of British jobs.

    • Ian Wragg
      Posted September 5, 2017 at 7:48 am | Permalink

      I’m on my 3rd Honda and I can assure you many parts are UK products and the content is increasing annually.
      My brother in law collects and delivers components and his business is booming.
      They are very good cars.

  2. Lifelogic
    Posted September 5, 2017 at 6:12 am | Permalink

    You say “the UK government is promoting R and D in new vehicles and new technology”.

    I am all in favour of sensible R&D in nearly all areas of technology (though government rarely pick the right areas or the right approach). But what the UK (EU and other) governments are doing is promoting (and rolling out) duff & premature technology with tax payer subsidies and rigged markets. This is totally misguided waste of money. So why are they doing it?

    We see it with the so called “renewables”, biofuels and with electric cars. Outside a few very special situations this technology is a total waste of time and money (given the current technology). We are just littering the country with expensive and ugly white elephants that will need to altered or removed later.

    Yes R&D on better batteries, fuel cells, reducing emissions and alternative energy sources and fuels. But to roll out duff technology before it is remotely economic is bonkers.

    • G
      Posted September 5, 2017 at 9:03 am | Permalink

      The question is, WHY government rarely picks the right areas and right approach? But you are right general consensus seems to be fully signed up to chemical batteries. A typically frustrating example…

      • Lifelogic
        Posted September 5, 2017 at 12:22 pm | Permalink

        The answer to “Why” as above is very simple. It is not their money they are spending/wasting and the people making the decisions will not benefit directly if they hit on a winner.

        So they care not what they spend nor what they spend it on much!

        • Lifelogic
          Posted September 6, 2017 at 3:28 am | Permalink

          Also so few in politics & the state sector seem to have much of a grasp of science, logic, maths, economics, business or reason.

    • alte fritz
      Posted September 5, 2017 at 9:36 am | Permalink

      Good point. Governments have pushed biofuels to an extent that seems to promote dangerous (people killed on biofuel plants) and unreliable (numerous breakdowns) technology. Is this what we want our energy supply to rely on?

      • Lifelogic
        Posted September 5, 2017 at 12:46 pm | Permalink

        Importing wood (biofuels) from miles away is clearly insane, on any rational analysis. This even if you do belief in the climate alarmism, carbon dioxide “pollution” religion.

        It is not their money being wasted, so they care not!

        • stred
          Posted September 7, 2017 at 8:23 am | Permalink

          When the late great Prof MacKay published his SEWTHA book in 2008, the UK had a CO2 content of generation of 550g/ kwh. We have reduced it, supposedly, to about 350g by changing to more gas, less coal, and burning American trees with more intermittent expensive wind and a tiny bit of solar. The Germans are now producing more CO2 because they closed nuclear and burn dirty lignite, despite all their wind and solar greencrap. Even if the true figure for American tree burning were to be used instead of the EU figure of zero, we would still be ahead of our green cousins.

          So why are we putting up bills even more by building huge numbers of windfarms at sea and in Scotland, while building the only nuke in the world which doesn’t work and is much more expensive? If only we had some numerate politicians and civil servants chosen for the job.

    • NickC
      Posted September 5, 2017 at 10:44 am | Permalink

      Hinckley C is a direct consequence of the 2008 Climate Change Act, that egregious response to the CAGW hoax.

      I think politicians are unaware that climate scientists are backing away from the claim that a global catastrophe is imminent, even going so far as to say that CAGW was invented by climate sceptics to discredit climate science!

      G, The advocates of chemical batteries are usually non-technical people who see technology as magic. They also fail to appreciate the energy chain from nuclear/gas to roadwheels, and the inherent losses at every stage. Or that we will have to double our electricity generating capacity within 23 years.

      • Lifelogic
        Posted September 7, 2017 at 4:29 am | Permalink

        Exactly. Even the charging and discharging of batteries wastes a great deal of energy – unlike the filling of a fuel tank.

        This especially when on rapid charge. Then there is the problem of the short range, manufacturing energy used and the rather short life of these very expensive batteries.

    • Lifelogic
      Posted September 5, 2017 at 12:29 pm | Permalink

      So Theresa May is to take the pay cap off the state sector. They are still remunerated (with pensions included) at nearly 50% more than those who work in the private sector and they produce rather little of any real value.

      So what exactly is May’s justification for this move? What has she got against these 80% who work in the private sector whose taxes fund them?

    • stred
      Posted September 6, 2017 at 7:16 am | Permalink

      The government is bunging £100m to build a factory in Coventry to build a new battery powered London taxi cab. Licences for IC cabs will be refused from next year and drivers are expected to buy a subsidised electric cab. I stay in a part of London where they live and many are already retiring, as cycle lane congestion and competition from Uber has decimated earnings. Ubers and any taxi drivers are likely to buy hybrids instead. These are more comfortable, cheaper and don’t need stops to re-charge, not that there will be enough re-charging points anyway.

      There will be the same CO2 from power stations and a bit less pollution. 60% of particulates comes from brakes and tyres (see Up in the Air). Reductions will give a theoretical extended life span for someone living in high pollution of about a week.

  3. Bryan Harris
    Posted September 5, 2017 at 6:12 am | Permalink

    JR – is there a reason you why you don’t approve my posts – am I wasting my time writing them?

    • Mark B
      Posted September 5, 2017 at 7:02 am | Permalink

      No, you are not wasting your time. just keep going and keep complaining.

      Squeaky wheels and all that 😉

      Reply Write shorter comments if you want faster posting

      • Bryan Harris
        Posted September 5, 2017 at 1:32 pm | Permalink

        Sorry JR – sometimes a reply can’t be limited to a couple of sentences.

      • hefner
        Posted September 7, 2017 at 6:49 am | Permalink

        “Write shorter comments if you want faster posting”
        How many shorter comments are we allowed? Ten? Eleven?
        Or do we have to register first as “official windbag” to be published?

  4. eeyore
    Posted September 5, 2017 at 6:45 am | Permalink

    Yet more uncomfortable figures for Remainers to explain away. They set me thinking. How much richer would Europe be without the EU? What has the EU done for Europe?

    Remarkably, googling both questions produced no answers at all, not even the usual canard about it keeping the peace for 60-odd years. I suspect that, were it not for the EU, Europe would be a much wealthier (and happier) place. Has anyone looked into it?

    • Lifelogic
      Posted September 5, 2017 at 7:09 am | Permalink

      How much richer we would all be with sensible small government?

      Well since 1980 GDP PPP in Hong Kong has grown from about $15,000 to $45,000 in the UK over the same time from $25,000 to just £35,000. So on the same growth rate as HK the UK should nearly twice as rich as it is.

      The Hong Kong government could easily be improved upon too and we could have done even better.

      But not with tax borrow and piss down the drain, interventionist, gender pay activists and socialists like May and Hammond in charge alas.

      • Dennis
        Posted September 5, 2017 at 1:14 pm | Permalink

        LL – You and all others, don’t ever mention where this wealth fundamentally comes from so I think you have no idea – have you?

        And what that knowledge should tell you.

        • eeyore
          Posted September 5, 2017 at 5:39 pm | Permalink

          A year or so ago a Guardian journalist memorably told us: “Of course there’s a magic money tree. It’s called the Bank of England. Where else do you think money comes from?”

          I quoted this to the chaps at my local. One (a farm labourer, as it happens) ruminated deeply. At last he spoke: “What about hard work?”

          Satisfied, Dennis?

        • Lifelogic
          Posted September 6, 2017 at 3:59 am | Permalink

          Well it certainly does not come from having a state sector that is nearly half the economy and hugely inefficient and misdirected too!

          The state sector is circa 19% of GDP in Hong Kong and 49% in the UK.

          • hefner
            Posted September 6, 2017 at 12:25 pm | Permalink

            HK, 104 km^2, 7 M inhabitants,
            UK, 243610 km^2, 66 M inhabitants
            Apples and pears, anyone?
            And this from someone harping daily about science, maths, …

          • Lifelogic
            Posted September 7, 2017 at 4:37 am | Permalink

            No two countries are identical, so of course you have to compare apples and pears! It does not invalidate the comparison. Why should a larger country have to have government expenditure as a far higher % of GDP? Economies of scale should really make it less and not more if run properly.

          • hefner
            Posted September 7, 2017 at 8:00 pm | Permalink

            What about a larger country like the UK needing more infrastructure than a city-state like HK? As a geographer (Vade retro, Satanas) would say, scale is important.
            Then
            debt to GDP: HK 38.4%, UK 89.3%.
            Growth Q2 2017: HK 1.0%, UK 0.3%
            Unemployment: HK 3.3%, UK 4.4%
            Economic complexity: HK 1.36, UK 1.60
            HK trading export/import mainly with China
            UK trading export/import top countries USA, Germany

            Comparison is certainly important, but if you really want to skew such effort, why not choose BVI or Belize, they would also have reasonable figures (as tax avoidance places).

      • Lifelogic
        Posted September 5, 2017 at 3:15 pm | Permalink

        The figures are all in US $ (not £)

    • Bryan Harris
      Posted September 5, 2017 at 7:51 am | Permalink

      That’s a very good question eeyore – and should be at the heart of the debate on how worthwhile the EU is…. or isn’t.

      Looking back over the centuries is as good a way to answer that as any – becuase what happened, due to the competition between the countries of Europe was an explosion of innovation.

      Each country grew and learned from each other, pushing the boundaries constantly.

      What do we have now?
      – stagnation;
      – limited competitive innovation;
      – red tape and excessive overheads imposed by the EU.

      To my mind the EU has failed to bring out the best in European humanity – never mind the socialist angle – the EU have failed us all by stifling natural progress.

      —–

      Sorry JR – sometimes a reply can’t be limited to a couple of sentences.

    • Denis Cooper
      Posted September 5, 2017 at 8:59 am | Permalink

      Just about the huge, crucial, benefits of the EU Single Market, as explained to us by Michel Barnier himself five years ago:

      http://johnredwoodsdiary.com/2017/09/04/the-german-election/#comment-887277

      For us, something around 1% added to our GDP, equivalent to trend natural growth of the UK economy over less than six months.

    • NickC
      Posted September 5, 2017 at 10:28 am | Permalink

      Come on Eeyore, the Remains have explained: “For every £1 we put into the EU, we get back nearly £10”. So all we need to do is retire, sit back and feed the EU a bit more cash and they will see us right with 10 times more.

  5. Duncan
    Posted September 5, 2017 at 6:48 am | Permalink

    I’ve a great idea. Let’s elect a government led by a person who rejects aggressive state intervention in the productive sectors of the UK economy and embraces the purifying power of the market, cuts business taxes, liberalises the labour market and understands that prosperity does not emanate from the activities of politicians

    Let’s elect a government led by a person that as the courage and belief to confront and reform the bloated, wasteful vested interest that is the public sector also known as the STATE

    Let’s elect a government led by a person that understands that an economy is only successful when the private sector is allowed to do what it does best, generate profits without some political busybody sticking their socialist, politicised beak in where it’s not wanted

    Stop politicising all aspects of life especially business. It is not wanted. Leave that nonsense to Labour. The Tories should understand that the private sector performs at its best when it’s not being badgered by a PM who thinks capitalism is evil.

    A Karl Marx wannabe as leader of the Conservatives leaves a sour taste

    • Lifelogic
      Posted September 5, 2017 at 7:16 am | Permalink

      Indeed we have had far too many dire, pro EU and essentially socialists as Tory PMs. Heath, Major, Cameron, May.

      Can we have one now who is really “a low tax small government Conservative at heart” and actually believes in Westminster based democracy please – just for a change. Preferably someone who has had not fallen for the unscientific, climate alarmism religion too please.

      • fedupsoutherner
        Posted September 5, 2017 at 12:41 pm | Permalink

        LL Agree with your comments wholeheartedly especially regarding the ‘green’ religion.

      • CvM
        Posted September 5, 2017 at 3:14 pm | Permalink

        Or alternatively one who would get elected as PM with a majority. I cannot believe the one you describe would have a chance amongst the who electorate (as opposed to a right wing echo chamber). One with a little less interventionism, and good at communicating why that would work, yes.

    • oldtimer
      Posted September 5, 2017 at 8:04 am | Permalink

      You need first to persuade the Conservative parliamentary party of that line of thought. At the moment they only seem to pay lip service to it. That said, I agree with your comment.

    • Dame Rita Webb
      Posted September 5, 2017 at 8:16 am | Permalink

      Sorry but you get the leaders you deserve. Too many voters have a vested interest in the welfare state’s free money machine. As soon as they realise that they will be out of pocket, they throw their hands up in rage e.g. reforming tax credits and believe it or not a family pulling in around £50k p.a. is still entitled to a reduction in their tax bill. Look at the trouble the “dementia tax” caused the Conservatives during the last general election. The British are soon going to have to change their cultural norm of putting aged relatives in a home or getting someone else to feed/clean them. The state cannot provide this for everyone. Its interesting to note that in Catholic Europe (particularly Spain and Poland) its considered barbaric to put a granny in a home. Visit many a Polish home and you will always find an ageing babcia sitting in the corner.

    • Mitchel
      Posted September 5, 2017 at 9:49 am | Permalink

      But what would the born-to-rule,governing classes then do to earn a crust?The Empire’s gone,those traditional mainstays of the Victorian-Edwardian Establishment,the Armed Forces and the Church,have withered or become a joke;what was left for them but to become a new Commissar class and inflict a very self-serving version of Marxism on us.

      “The tyranny that the Athenian empire imposed on others,it finally imposed on itself” – Thucydides.

    • agricola
      Posted September 5, 2017 at 10:12 am | Permalink

      A very fair comment Duncan. Government should only be active in curbing the excesses of a market economy. This government neither frees up a market economy , it only over taxes enterprise, nor does it do anything to curb the excesses, think payday loan companies , ambulance chasing lawyers, and a glut of gambling. All three bombard our TV waves daily and hourly. Just maybe when the excitement of Brexit is put to bed we can elect a government that is market oriented.

  6. margaret
    Posted September 5, 2017 at 6:53 am | Permalink

    This idea of part petrol and part electric engines seems to be a good way for development. I have a ford at present , not particularly out of first choice. I simply had to have a car to carry on with my District Nurse job and just about managed to drive my citroen into the garage before it broke down .Yes, Nurses have to buy their own cars to drive around miles and miles to give patients eye drops! I am not really satisfied with this Ford B max . It is a noisy car , with some fancy features such as hands free phone connection ..which is difficult to upload with phone numbers, however this technology is what is required for the future as the police clamp down on the dangerous practice of mobile phone use in cars. I must admit I get a few funny looks as I appear to talk to myself ( mind you I have argued with the radio out loud for many years , so nothing changes there) . I feel the combination of technology and noiseless vehicles with fuel saving methods are the future.

    • Lifelogic
      Posted September 5, 2017 at 7:25 am | Permalink

      Hybrids can be good (with the regenerative braking for stop start in cities) they can make good sense. You can also do the same sort of regenerative braking/energy storage with compressed air too – and this can actually be more efficient than battery storage.

      But on a long, fairly constant speed, motorway journey hybrids are usually worse on fuel consumption than a conventional car. They are far more complex and expensive (and thus energy consuming) to build and maintain too.

    • acorn
      Posted September 5, 2017 at 8:50 am | Permalink

      Sadly margaret, according to “Duncan” (above), you are part of the bloated public sector. The private sector can do your job much more efficiently with a minimum wage, a semi single skilled “eye drop” operative, on a zero hours contract.

      Duncan says “an economy is only successful when the private sector is allowed to do what it does best, generate profits”. True to some extent; BUT, the private sector doesn’t do things that don’t make profits, unless the state forces them to do it for the good of society.

      In Duncan’s “society free” economy he would find with no public sector spending, the private sector would actually run out of customers with any money to buy its goods or services.

      There is not one nation on this planet that has a private sector that exists without the support of a currency issuing public sector to regulate and keep it financially liquid, when it gets into trouble. Ask the Bankers about 2008.

      • margaret
        Posted September 5, 2017 at 11:07 am | Permalink

        Not me Duncan . I am not part of a bloated public sector. I had 2 jobs and gave up the district Nurse P/T job last year. There are staff shortages though in District Nursing , however if I were to take over there would certainly be more health care assistants to carry on with menial tasks , but the qualifications for DN’s are at a low level and the management is grounded in some outback where Nursing must have meant caring.

        I have a main job which Is Nurse Practitioner . I do the same work as a GP . We are exploited : however I only have 2 years to go and enjoy the responsibility and getting things right. I have nearly 50 years experience in every setting imaginable therefore know where waste is .The private sector more recently have wasted vast amounts of public money as they look at paper qualifications without any significance.

        • margaret
          Posted September 5, 2017 at 12:42 pm | Permalink

          PS . I would say that employing Drs who have just qualified to do my job in the private sector at 5 times my salary is bloated, teaching them many things about my job. You don’t know the half of it. Many also have mickey mouse qualifications. Remember there isn’t anywhere I haven’t been within/medicine health in the NHS or private sector for 50 years. I have more idea than a few consultants who have done a couple of specialities in their lives .

      • Lifelogic
        Posted September 5, 2017 at 12:56 pm | Permalink

        We certainly do not need the state sector to issue currency that it the cause of many of the problems and the endless devaluation of money. We do need the state to police law and order, protect property rights and arrange defence.

        Not much else though.

        • hefner
          Posted September 5, 2017 at 9:00 pm | Permalink

          And who will be building and maintaining the infrastructure? Are you expecting the Chinese to build/repair the roads, the train lines, the airports, harbours?

    • a-tracy
      Posted September 5, 2017 at 8:55 am | Permalink

      Companies using worker’s cars for business use usually have to pay mileage rates (45p per mile for 10,000 miles then 25p subsequently); ensure that the car is taxed and MOT’d (if required) and insured for business use and check that the car is road worthy from time to time as though it was a company vehicle.

    • Know-Dice
      Posted September 5, 2017 at 9:17 am | Permalink

      Margaret, completely off topic 🙁

      Your question the other day about the upside down Spanish question mark.

      Press Alt then 0191 on the numeric keypad (PC) – ¿
      And upside down ! is Alt 0161 – ¡

      And yes if you live in another country then it makes sense to learn their language and understand their culture…

      • getahead
        Posted September 5, 2017 at 6:49 pm | Permalink

        Know-dice. I have Alt-168 ¿. That works with fewer numerals.

    • Leslie Singleton
      Posted September 5, 2017 at 7:58 pm | Permalink

      Dear Margaret–Hybrids are a half way house that I for one am unlikely to be happily buying anytime soon. I was impressed the other day when I read that the number of moving parts in a pure electric car is very very much less (this rings true) than in a petrol but God only knows not just how many (the sum plus parts to join the two at least?) there are in a hybrid but how complex such a car must be interdependent as it all must be. In other words more to go wrong which might not be a big problem when the car is new but is likely to become one as the car gets older. Personally, under the bonnet even in my aged BMW scares me just to look at it and a hybrid is going to have even more to go wrong. Is my local garage going to be able to service a hybrid? One cannot expect mechanics all to become electronic Einsteins and we cannot all afford Main Dealer service charges, that’s if there is such a thing nearby–unlikely in say the wilds of Scotland where one is doing well to find a petrol station let alone anything else. From what I have seen and read I favour Hydrogen cars for the longer term.

  7. Dame Rita Webb
    Posted September 5, 2017 at 6:55 am | Permalink

    … and your comments on our current account deficit, the ever increasing levels of personal debt and how long the plates can keep spinning?

  8. Mark B
    Posted September 5, 2017 at 7:00 am | Permalink

    Good morning.

    Boosting the component proportion is an important part of the strategy to generate more jobs here . . .

    And a very good strategy too ! Even after a car or any product is sold, components will be needed the original parts wear out.

    Ford moving production from Southampton to Turkey was a disgrace. Not for simply for business reasons, although Ford did get a pile of cash from the EU (in truth UK money) to build the plant but, the fact that Turkey is not in the EU but only the Customs Union. It therefore makes a further mockery, one that is lost on many BREXITIERS, of remaining in the EU.

    Once out of the EU, and especially their Customs Union, we will be able to source cheaper goods from elsewhere. This should bring down our deficit as a whole making the pound a little stronger and economy more stable. This would lead to further investment and more growth. Wages and costs should fall but, and only but, when this government realises that MASS immigration is a bad thing. Immigration is OK so long as it is in line with our needs and numbers can be absorbed. But at current rates, even from non-EU countries, it is unacceptable !

    • Sir Joe Soap
      Posted September 5, 2017 at 7:49 am | Permalink

      This Ford business makes it crystal clear that we shouldn’t pay a penny in settlement to the EU, and perhaps should pull out from paying anything from today unless terms to the effect that no UK money can be used again in this way. The fact that any settlement money offered by the UK could be used (and undoubtedly would be used) to bribe EU (or even non-EU) countries to take business away from the UK is scandalous.

      • Sir Joe Soap
        Posted September 5, 2017 at 7:50 am | Permalink

        We need to take a more business-like approach in these negotiations!

    • Denis Cooper
      Posted September 5, 2017 at 8:53 am | Permalink

      Most precisely Turkey is not actually in the EU Customs Union, not yet being an EU member state, it is in a customs union with the EU Customs Union.

    • agricola
      Posted September 5, 2017 at 10:28 am | Permalink

      I’m not so sure that putting a van assembly plant in Turkey is such a bright idea. Turkey is a long way from the best component manufacturers, unless Ford have persuaded them to decamp to Turkey as well or build Kanban warehouses adjacent this Ford plant. It is a length of supply chain that I would only trust the Japanese to handle.

      For the UK to concentrate on high tech auto components makes sense because that is where there is real value.

  9. fedupsoutherner
    Posted September 5, 2017 at 7:21 am | Permalink

    I cannot believe that Ford are moving to Turkey and with Eu money to do so. This is what is so wrong about the EU. Giving companies money to desert one of the country’s that pay the second largest amount to the EU coffers. What do we get out of it? A big fat zilch. I am amazed that without a level playing field the UK is weathering the storm and is in fact doing well with all the negative feedback around at the moment concerning Brexit. Don’t these remainiac ministers look at these figures and realise the UK is perfectly capable of managing their own affairs?

    In my local major town in SW Scotland one of the car dealers has just opened a brand new state of the art showroom for Jaguar and Land Rover cars alone. The old showroom which was also vast is now home to Volvo. The Jaguar/Land Rover showroom is akin to something out of a futuristic scene. Wonderful facilities for customers, showing off their cars to the best effect and a sight to behold they are. They may be foreign owned now (a real shame) but at least they provide many jobs in the UK car industry and all the time we can afford to we will continue to purchase one. Great news indeed John.

  10. The PrangWizard
    Posted September 5, 2017 at 7:22 am | Permalink

    And let’s act somehow to stop any more home-owned businesses being sold off to foreign buyers at the drop of a hat. We must take a determined for once long term political and economic view, and take The City’s greed out of the equation.

    It hasn’t done the country much noticeable good to sell so many UK brands. The term open for business should not mean ‘Everything is for sale’. In spite of all these sales over decades we still have a deficit. And how much of the cash and profit generated ends up in overseas investors hands annually? There must come a point where the money going out exceeds the money coming in.

  11. Iain Moore
    Posted September 5, 2017 at 7:28 am | Permalink

    The increased activity in manufacturing due in part from the lower sterling level should be used to leverage in a permanent increase in our manufacturing base . In the past the benefits of a lower currency was cashed in and not invested in productivity and training. We must make sure this time it is different . I hope the Chancellor will make it impossible for even the most avaricious boss to pass up the opportunity to invest in their business.

  12. oldtimer
    Posted September 5, 2017 at 8:16 am | Permalink

    I suspect that the rundown at the Ford Bridgend plant reflects, in part, the end of the transitional engine supply contract with Jaguar Land Rover after the latter was bought from Ford by Tata. Since then JLR has built a new engine plant at Telford from which we have seen, so far, the 4 cylinder variants; in line 6 cylinder variants are expected to replace the Ford V6s.

    Of course, in return for investing c£1 billion in these facilities, Mr Gove deemed it appropriate to undermine it by declaring war on the internal combustion engine. This has had the inevitable effect, along with Mr Hammond’s tax changes on new car purchases, of slowing sales in the UK of the vehicles that JLR produces. Fortunately for JLR, most of its sales are made overseas. When it comes to this industry, the government seems to have learned nothing from and forgotten everything about its past ill advised interventions.

  13. formula57
    Posted September 5, 2017 at 8:47 am | Permalink

    A new manufacturing plant was recently commissioned in Russia by Daimler-Benz (see https://www.reuters.com/article/us-russia-daimler-factory/daimler-presses-ahead-with-mercedes-benz-plant-in-russia-idUSKBN19B27B ).

    Where is ours?

    (I note in passing DB offers many petrol-engineed vehicles at home but not here, so obliging UK consumers who want a Mercedes to buy its diesels. A reason, so I am told, is that the EU imposes fines on car manufacturers for making CO2-creating products (ignoring the more noxious nitrogen emissions from diesels) and restricting petrol engine sales is a way of limiting those fines. Once again, the Evil Empire strikes!)

    • formula57
      Posted September 6, 2017 at 9:11 am | Permalink

      Further, that Russian plant (that came about after what is described as a very, very successful conversation with the Russian government) will make 20,000 vehicles a year and DB is reported as saying that it wants to build vehicles where its customers are located. DB sells more than 100,000 vehicles a year in the UK.

      Past time for Mr. Clark to have a similar very, very successful conversation I would say or make way for someone who will.

      (Obviously extra NHS costs would have to be factored in, to treat Remoaners driven apopletic if/when DB commissions a plant here.)

  14. Denis Cooper
    Posted September 5, 2017 at 8:47 am | Permalink

    “The UK industry runs a £13 bn surplus with the rest of the world and a £21.8bn deficit with the rest of the EU on vehicles. It also runs a £6.2bn a year deficit on components with the rest of the EU and is in balance on parts with the rest of the world. The EU has not been a good or easy market for the UK industry.”

    Which is well worth remembering the next time some europhile starts rabbiting on about the vital importance of the EU Single Market for our car industry.

    It’s strange that neither Cameron nor Osborne nor any other Remain campaigner was ever seen in a UK car plant pointing out to the attentive workers how much of the UK domestic car market is taken up by imports, mostly from the rest of the EU:

    http://johnredwoodsdiary.com/2017/03/17/movement-in-eu-thinking-on-brexit-and-populism/#comment-860687

    “It’s easy to say … that 8 out of 10 cars made in the UK are exported … and gloss over the fact that imports of cars from the rest of the EU are much greater than our exports to them … and forget how much of our home market is taken up by imports … 1.72 million cars made in the UK in 2016 … 1.35 million exported … so wouldn’t that be about 0.4 million new cars both made and sold at home, out of a total of 2.7 million new cars sold in the UK … Meaning that 85% of the UK car market is taken up by imports”

  15. Nerwmania
    Posted September 5, 2017 at 8:52 am | Permalink

    In 2016, of 1.7m cars built in the UK,( a record output ), exports accounted 1.35 ,and over half went to Europe (up 7.5% ). Prodigious foreign investment, since the mid-80s, ( in automated assembly, and internationally coordinated production), created a new world class industry, employing 814,000.
    The investment came here, to access the single market (56% of car exports and 65% of components going to EU countries) and the pan European skills and economies. 70% of the value of an exported car is also imported .
    The frictionless border, outside the customs union and single market has now been admitted to be an invention, but Brexit propaganda like John` post bears no relation to the real world business decisions anyway.
    In fact, investment in the UK car industry has already fallen to just £322m in the first half of 2017. Last year £1.66bn was invested in the auto sector, more than 30 per cent down from £2.5bn in 2015. We are on course to see levels at one-quarter of the amount invested two years ago.
    The destruction of car manufacture in the UK seems inevitable. A responsible government should prepare to help the devastated post-industrial areas it has sacrificed.

    • Denis Cooper
      Posted September 5, 2017 at 10:45 am | Permalink

      Car imports from the EU are roughly THREE TIMES our car exports to the EU.

      So who is getting the greater benefit from the EU Single Market in cars?

      • Mark B
        Posted September 5, 2017 at 5:21 pm | Permalink

        Not to forget that the Single Market in Services, where we are undoubtedly strongest, is not, and probably will never be, complete.

      • ian wragg
        Posted September 5, 2017 at 5:32 pm | Permalink

        Stop quoting facts Denis he finds them confusing. There is no mention of them on his crib cards issued by Brussels.

      • Posted September 5, 2017 at 6:28 pm | Permalink

        Denis cooper..yes and when all of this is over the importation of cars from the EU will be down to a trickle so then we can concentrate on buying home produced. So I don’t know what all of this talk about cars is as there are so many other things as well to consider..must be the silly season still

        • Know-Dice
          Posted September 6, 2017 at 11:56 am | Permalink

          It’s not about cars per se, it’s about how long the German politicians will be able to persuade the German people (auto workers) that the EU project is more important than their jobs…

  16. a-tracy
    Posted September 5, 2017 at 8:56 am | Permalink

    I had family members that lost their long standing jobs in car and van component makers in the Midlands, it was a very sad time and lots of these factories are now housing estates.

  17. Epikouros
    Posted September 5, 2017 at 9:03 am | Permalink

    I am an ardent supporter of globalised free trade and cooperation as I believe it is the true path to peace and prosperity. I champion unilateral free trade regardless of how unfair the practices are of some exporting countries as this usually means that the exporters are selling cheap goods because they are subsidised by their nations taxpayers. As a consume I have no objection to Johnny foreigner sharing the cost of goods I buy so as to make them even cheaper for me. Until you pointed out today that the imbalance of trade that we have with the EU as compared to the rest of the world is considerable I believed that after Brexit the UK could declare unilateral free trade with the EU. That is no longer true.

    Not that I have not known about this imbalance but until now I have not thought about the reasons why. I assumed that is was because their quality, price and efficiency was better than ours. That is partly true but more importantly it is because we are locked into a rigged market and excluded from a much larger more competitive mostly free of obstructive legislation and regulations market. Brexit will change that but until the EU changes it’s protectionist ways that go far beyond normal unfair trade practices the UK should seek to reduce reliance on products coming from that source. No doubt we will be assisted in this by the fact without EU restrictions we will be able source goods and services from the wider world at a better price.

  18. G
    Posted September 5, 2017 at 9:17 am | Permalink

    I hope Mr.JR can clarify some things:

    If the government promotes extensive R & D, who retains the resulting intellectual property?

    As the European have become so deeply involved in investing in our R & D programs, does it follow that they retain proportionally the resultant IP?

    Are we similarly involved with, for example, German R & D programmes? Is Germany as open as we are to EU involvement in its R & D?

    Murky areas I’d say…

  19. Bert Young
    Posted September 5, 2017 at 9:21 am | Permalink

    The automotive industry in this country has a secure future because most of the base skills in design and engineering development are recognised at an educational level ; apart from Ferrari , all the Formula One teams are based here and rely on this .

    Had it not been for Union influence the volume of automotive manufacture would have been much larger today . So many marques went to the wall through poor management and control which the Unions exploited . An open door then existed for outside companies to come to this country bringing with them their tougher disciplines ; since then they have thrived .

    There are many lessons to be learned from the ills of the late 60s and 70s ; it takes a strong Government to make sure that Union management and activity does not take us down the wrong path again .

    • sm
      Posted September 5, 2017 at 12:58 pm | Permalink

      Couldn’t agree more Bert. I worked for Ford in the late 60’s, and a friend spent his whole career with them in commercial vehicle design, and we watched in amazement as British Leyland committed suicide with the enthusiastic ‘help’ of the Unions and Government.

    • graham1946
      Posted September 5, 2017 at 2:22 pm | Permalink

      A lot of it was due to poor design and outdated production. I heard it said by one manufacturer that when things were bad they couldn’t afford to invest and when they were good, they didn’t need to. That’s the poor management. We produced some pretty awful cars until the Japanese came along firstly with their motor bikes then cars. British bikes were killed off almost overnight. As far as I remember, even the German and French cars were pretty dire then. I think the average 60’s and 70’s British car lasted about 8 years before they fell apart with rust and engines were knackered at 100,000 miles.
      The Japs took a while and produced some junk at first too, probably copying our methods which they used to do a lot of, but soon developed and showed the way forward. Cars are good now, but still a rotten investment as far as use of money is concerned.

  20. Prigger
    Posted September 5, 2017 at 9:43 am | Permalink

    “UK Manufacturing looks stronger in August”
    Well it may do. Voters concern is as IDS famously hoisted the matter-of-fact to its rightful place… Having a job! The bottom line…not necessarily the deductions … on the payslip!

  21. Denis Cooper
    Posted September 5, 2017 at 10:37 am | Permalink

    I wish people would stop repeating that the (stupidly named) “Great Repeal Act” will transfer all EU law into UK law, because the legal and constitutional reality is that all applicable EU law is ALREADY part of our domestic law.

    (The adjective “applicable” here only being necessary because the UK has a number of agreed EU treaty opt-outs, under which some EU laws do not apply to the UK.)

    What the Act will actually do is to move all applicable EU law from its existing base in UK law, the European Communities Act 1972, to a new legal foundation, the new Act itself, where the laws will be henceforth be exposed to the possibility of amendment or repeal just by domestic rather than EU legislation.

    I also wish people would stop repeating that the Bill is an attempt by government to seize power and sideline Parliament, another nonsensical claim as explained here:

    http://johnredwoodsdiary.com/2017/09/02/why-do-some-commentators-and-many-in-the-media-exaggerate-the-economic-impact-of-brexit/#comment-886911

    The Labour party, and especially Keir Starmer, is behaving disgracefully.

    Reply Its title is EU (Withdrawal) Bill

    • Denis Cooper
      Posted September 5, 2017 at 11:08 am | Permalink

      Oh, and so too is Dominic Grieve, he who argued that to affirm the sovereignty of Parliament would “create a constitutional contradiction”.

    • Denis Cooper
      Posted September 5, 2017 at 4:17 pm | Permalink

      Watching the Commons debate this afternoon it’s perfectly clear that most of the Labour MPs are on the side of the EU against their own country. No doubt in 1940 these traitors would have been laughing at the defeat of the British Expeditionary Force and looking forward to the Luftwaffe wiping out the RAF. The question is how our political system can work so badly to put such people into Parliament.

  22. Christine
    Posted September 5, 2017 at 11:15 am | Permalink

    I read somewhere that Ford was given a grant by the EU to move production from Southampton to Turkey. Also other UK manufacturers have been given grants to move out of the UK. It seems we are being asked to pay for our own demise. I myself lost my job because the Scottish parliament gave my company a grant to relocate to Scotland so long as they employed Scottish people. This shouldn’t be allowed to happen.

    • Mark B
      Posted September 5, 2017 at 5:25 pm | Permalink

      And it would have never have happened had we not had an English Parliament with solely elected English MP’s.

      Sorry for your loss.

  23. Richard Butler
    Posted September 5, 2017 at 12:42 pm | Permalink

    The highest proportion of British manufacturers in at least 20 years now report rising output and orders.
    •Respondents report especially strong demand from the European Union.

    http://www.forexlive.com/news/!/more-uk-data-manufacturers-report-rising-output-and-orders-20170904

  24. Denis Cooper
    Posted September 5, 2017 at 2:20 pm | Permalink

    In chess notation this move by Labour might be marked “?”, a mistake, or even “??”, a blunder, but I wonder whether the government (and in particular David Davis) can be bothered to take full advantage of it.

    http://www.independent.co.uk/news/uk/politics/labour-brexit-repeal-bill-vote-against-jeremy-corbyn-whips-leave-eu-go-a7930616.htm

    “Labour set to order MPs to vote against Brexit repeal bill”

    “As democrats we cannot vote for a bill that unamended would let government ministers grab powers from parliament to slash people’s rights at work and reduce protection for consumers and the environment,’ the party said in a statement”

  25. CvM
    Posted September 5, 2017 at 2:54 pm | Permalink

    I work in Germany and was speaking to some colleagues at lunchtime about Brexit. One point mentioned which I found interesting was from a TV report that they had seen. It explained the complex nature of car component supply chains and had followed a part made in UK, shipped to continent and incorporated into something bigger which was then shipped back to BMW in Oxford. Here it becomes part of a Mini that is then exported back to the continent. The point was that, even if the various component parts which cross in / out UK twice before going into the final product are not subject to tariffs there would still be an administrative burden on the companies involved to provide evidence / paperwork / electronic documentation (process presumably unspecified as yet) to prove that the part at the time of shipping IS tariff free

    • ian wragg
      Posted September 5, 2017 at 5:36 pm | Permalink

      Then they can reduce the supply chain which many are doing (Nissan announced only last week they were increasing local content from 40 to 80%). After all there is a cost to shipping these components back and forth.
      Sometimes I wonder if it is needlessly complex just to cement us into the EU.

    • stred
      Posted September 6, 2017 at 7:06 am | Permalink

      Surely, there will be thousands of parts flowing and repeat electronic documentation will be part of the ordering and payment accounts, taking milliseconds to transmit. Do they really think that BMW will have hundreds of clerks writing out forms for each and every part?

  26. Bursy Throwup
    Posted September 5, 2017 at 3:27 pm | Permalink

    I hoped The Speaker Mr Bercow would have retired in the holidays complete with his English Country Flower Garden of compostable retorts. There are serious matters to discuss.

  27. agricola
    Posted September 5, 2017 at 3:56 pm | Permalink

    Dear Mr redwood,

    In many senses post Brexit is a blank page. A page on which we can write our future. It is interesting to speculate on the future for a nation post empire having extracted itself from an empire it had no empathy with, the EU. To do it with success is a real challenge as previous empires have disappeared in the dust of history.

    What I would like to hear from you is your vision for the future of the UK. Detach yourself from party politics and let us know how you would like society to develop. I would suggest that no political philosophy can hope to succeed outside the creation of wealth. Poverty does not buy anything, certainly not a cohesive society. I would add for clarification that whatever wealth is created it must percolate throughout society. There is no place for people who miss out or through life’s misfortunes are not supported.

    So what is your vision for how we achieve it. UK society needs a map.

  28. Non!
    Posted September 5, 2017 at 4:35 pm | Permalink

    JR I saw you in BBC Parliament today in questions being made to David Davis, Brexit Minster. Did I hear correctly?
    Did he say the British position is that EU citizens here should be allowed to continue voting in “municipal elections”, that is Local Council elections, and that the EU is against such?
    If so, I hope on this one issue the EU wins. Quite a few of our wards in towns have a high number of EU citizens eligible to vote in our local elections. Combine this with tribal voting…we will find Labour, LibDems and SNP not only have their British “tribal vote” for their parties but a block of a foreign vote to aid them. In some traditional Labour wards in my town the EU citizen voting presence has reached 25% to 30% of the local electorate. This means that in practice, effectively, British people who might wish something other than liberal-leftie and a reduction of immigration are disenfranchised in their own country. Surely this cannot be right?

    • hefner
      Posted September 6, 2017 at 7:33 pm | Permalink

      UK nationals officially resident in EU countries generally have the right to vote in local elections. So why could a UK person retired on the Costa vote in Spanish elections and not a Spaniard legally resident (and likely to be working) in the UK?

      Just asking.

      • Non!
        Posted September 8, 2017 at 8:54 am | Permalink

        Is an answer really necessary? You vote in the country which is YOURS.Belongs to you of which you are a subject, mind-numbingly obvious!

  29. margaret
    Posted September 5, 2017 at 4:59 pm | Permalink

    just watching the Brexit negotiations debate. There is so much repetition . I notice you tried to add a little meat to the discussion, but that will be put on the back burner as David Davis mentioned the financial negotiations haven’t even begun.

    The argument at giving a clear goal cannot be given as negotiations are about give and take and we cannot give the EU our playing cards hand before the media and general public. I notice that there will be a vote on monies owed etc , yet the price to pay doesn’t seem to chime with your expectations John.

    • ian wragg
      Posted September 5, 2017 at 5:38 pm | Permalink

      There will be an even bigger vote on monies due at the next election. If Parliament is seen to be spraying money at the EU whilst continuing to cut the armed forces etc, they will be destroyed.

      • hefner
        Posted September 6, 2017 at 7:24 pm | Permalink

        Ian, you will certainly not vote for them, but will they be destroyed? I doubt it, it will depend whether employment has kept steady, with possibly some slight wage increase, NHS not deteriorating more, this type of things.

    • Henry Spark
      Posted September 6, 2017 at 5:05 am | Permalink

      You are right, margaret. Reality is not playing out in the way Mr Redwood predicted. No trade deals with other countries, no free trade with the EU, and Mr Davis is going to pay a big bill

  30. Bloater
    Posted September 5, 2017 at 5:27 pm | Permalink

    Our economy really has not gone off the cliff on 24th June 2016 that Osborne, the present Chancellor Hammond, Bank of England Carney, the CBI, the TUC,Mrs May, Ms SoubryMP still, the massed cohorts of Labour, Lib Dems and SNP, Blair , Major, Miliband ( in his case 1930s food and giz-a-job queues ) hoped and prayed for. They are praying to a false God. All that about dancing around an oak tree with mistletoe in your teeth may be fun but it is no economic indicator even if everyone gives you a kiss. Whoever kissed Osborne should be thrashed with birch sticks and made to be a newspaper journalist for ten years minimum.

  31. Mark B
    Posted September 5, 2017 at 5:28 pm | Permalink

    Actually this is really bad news. Didn’t the EU once fine us for the temerity of actually being successful economy ?

    http://www.bbc.co.uk/news/business-29751124

    🙁

  32. hans chr iversen
    Posted September 6, 2017 at 12:18 pm | Permalink

    John

    why did you decide to forget to talk about 80% of the economy which is services which declined last month?

    Reply It didnt decline

    • hefner
      Posted September 6, 2017 at 7:10 pm | Permalink

      HCI, “UK service sector GROWTH hits 11-month low” (Guardian), it grows more slowly, but still grows.

  33. Mike Wilson
    Posted September 7, 2017 at 5:24 pm | Permalink

    I have to say, whilst not agreeing with everything Mr. Redwood writes, it is very refreshing to read positive things about our country. I wish our awful press would stop being harbingers of doom – EVERY day.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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