Five thoughts on John McDonnell’s promise to revive Britain’s manufacturing sector

The AirBus factory in Broughton, north Wales, 2013. Image: Getty.

“We want to rebalance our economy. We need to make sure we invest in our infrastructure. That means making sure we have regional investment right around the country as well. And that means we rebuild our manufacturing base so we balance out our finance sector and our manufacturing sector.”

The shadow chancellor John McDonnell set out his view of what economic policy should aim to do on the Today Programme last July. There’s a lot to unpack in those four sentences and the Labour Party’s ‘Build it in Britain campaign’ – much of which has popular appeal, but would actually do little to support growth across the country.

Here are five issues arising from McDonnell’s comments which are worth reflecting on.

1. We do still make things in the UK, contrary to popular belief

Firstly, despite concerns about the decline of the UK’s manufacturing sector, we do still make a great deal. As Jonathan Portes of King’s College London points out, UK manufacturing output has been fairly stable over the last four decades.

But two things have happened over that period that alter people’s perception. The first is that other parts of the economy have emerged and grown over that period, so we’re not as reliant on manufacturing as we once were – the industry now accounts for 10 per cent of GDP today compared to 31 per cent in 1970.

The second is that the number of people working in manufacturing has fallen sharply, so it is not the source of jobs that it once was (as it has done in other developed economies). Moreover, if it is to remain competitive on the global stage, it will be productivity driven and jobs light.

2. We don’t just export goods

A trap people from across the political spectrum often fall into is assuming that we only export goods. The reality is that services account for 46 per cent of UK exports, and play an even larger role in some cities – in Milton Keynes they account for half of all exports, and in Edinburgh it’s four-fifths.

A focus on exporting industries is important, particularly from a productivity perspective – it is these businesses that drive productivity and wage growth. But it’s wrong to mistake this for being goods producers only, which misleads us into false trade-offs around financial services and manufacturing.

3. London isn’t just finance, and finance isn’t just London

Much is made of the concentration of financial services in London. But it plays an important role in other cities across the UK: for example, it accounts for 58 per cent of exports in Edinburgh, 12 per cent of private sector jobs in Ipswich and is the most productive sector in Cardiff’s economy.

And while finance plays an important role in London’s economy,  it isn’t the capital’s only economic driver. Instead, its success is built off the back of strengths in other areas such as law, media and advertising. These strengths should both be celebrated and understood better – the benefits that London offers to such businesses explains why they have chosen the capital as their location, and other places need to address the barriers which do not make them as attractive.

4. The future for northern cities isn’t manufacturing alone

The big challenge for most cities outside the Greater South East is their ability to attract, retain and grow high-skilled exporting businesses, both in manufacturing and services. Crucially, it is the distinct lack of these businesses in these cities has contributed to the widening divide in terms of wages across the country.

Despite this, term ‘rebalancing the economy’ has been used by Nick Clegg, George Osborne and the current Labour leadership as shorthand for boosting manufacturing in the North as a counterweight to London’s financial specialism. But in the same way that London isn’t about finance alone, the idea that northern cities are where manufacturing happens is an outmoded view based on the politics of nostalgia. The focus needs to be on attracting in higher-skilled work in a number of sectors.

In some instances this may even require an explicit rebalancing away from manufacturing, not towards it, if the fortunes of these cities are to improve. Burnley currently has the highest share of jobs in manufacturing of any British city, with one in five being in this sector. Despite this, it performs poorly on a range of economic indicators, principally because its manufacturing base is relatively low skilled and it has a lack of higher-skilled service exporters. Both issues will need to change if the economic opportunities available to the residents of Burnley are to be greater in the next four decades than they have been in the previous four.

5. Public procurement strategies don’t offer the answer for struggling economies

One of the proposals offered by the shadow chancellor to support manufacturing is for local public bodies to preference local businesses. As I’ve written before, this is a form of protectionism in the same way that tariffs are a form of protectionism. And it raises a number of troubling questions.

For example, if Blackburn or Burnley adopts this approach, how exactly do they distinguish which businesses qualify for a contract? Will a firm respond to having competition restricted by upping its prices, costing the taxpayer? And what will the reaction from places elsewhere in the country – will they start a trade war?

Most cities outside of the Greater South East need to see an upturn in their fortunes if they are going to improve the opportunity available to their residents, make a larger contribution to the national economy and to address the UK’s poor productivity. The politics of populism and nostalgia will fail to deliver this.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

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Urgently needed: Timely, more detailed standardized data on US evictions

Graffiti asking for rent forgiveness is seen on a wall on La Brea Ave amid the Covid-19 pandemic in Los Angeles, California. (Valerie Macon/AFP via Getty Images)

Last week the Eviction Lab, a team of eviction and housing policy researchers at Princeton University, released a new dashboard that provides timely, city-level US eviction data for use in monitoring eviction spikes and other trends as Covid restrictions ease. 

In 2018, Eviction Lab released the first national database of evictions in the US. The nationwide data are granular, going down to the level of a few city blocks in some places, but lagged by several years, so their use is more geared toward understanding the scope of the problem across the US, rather than making timely decisions to help city residents now. 

Eviction Lab’s new Eviction Tracking System, however, provides weekly updates on evictions by city and compares them to baseline data from past years. The researchers hope that the timeliness of this new data will allow for quicker action in the event that the US begins to see a wave of evictions once Covid eviction moratoriums are phased out.

But, due to a lack of standardization in eviction filings across the US, the Eviction Tracking System is currently available for only 11 cities, leaving many more places facing a high risk of eviction spikes out of the loop.

Each city included in the Eviction Tracking System shows rolling weekly and monthly eviction filing counts. A percent change is calculated by comparing current eviction filings to baseline eviction filings for a quick look at whether a city might be experiencing an uptick.

Timely US eviction data for a handful of cities is now available from the Eviction Lab. (Courtesy Eviction Lab)

The tracking system also provides a more detailed report on each city’s Covid eviction moratorium efforts and more granular geographic and demographic information on the city’s evictions.

Click to the above image to see a city-level eviction map, in this case for Pittsburgh. (Courtesy Eviction Lab)

As part of their Covid Resource, the Eviction Lab together with Columbia Law School professor Emily Benfer also compiled a scorecard for each US state that ranks Covid-related tenant protection measures. A total of 15 of the 50 US states plus Washington DC received a score of zero because those states provided little if any protections.

CityMetric talked with Peter Hepburn, an assistant professor at Rutgers who just finished a two-year postdoc at the Eviction Lab, and Jeff Reichman, principal at the data science research firm January Advisors, about the struggles involved in collecting and analysing eviction data across the US.

Perhaps the most notable hurdle both researchers addressed is that there’s no standardized reporting of evictions across jurisdictions. Most evictions are reported to county-level governments, however what “reporting” means differs among and even within each county. 

In Texas, evictions go through the Justice of the Peace Courts. In Virginia they’re processed by General District Courts. Judges in Milwaukee are sealing more eviction case documents that come through their courtroom. In Austin, Pittsburgh and Richmond, eviction addresses aren’t available online but ZIP codes are. In Denver you have to pay about $7 to access a single eviction filing. In Alabama*, it’s $10 per eviction filing. 

Once the filings are acquired, the next barrier is normalizing them. While some jurisdictions share reporting systems, many have different fields and formats. Some are digital, but many are images of text or handwritten documents that require optical character recognition programs and natural language processors in order to translate them into data. That, or the filings would have to be processed by hand. 

“There's not enough interns in the world to do that work,” says Hepburn.

Aggregating data from all of these sources and normalizing them requires knowledge of the nuances in each jurisdiction. “It would be nice if, for every region, we were looking for the exact same things,” says Reichman. “Instead, depending on the vendor that they use, and depending on how the data is made available, it's a puzzle for each one.”

In December of 2019, US Senators Michael Bennet of Colorado and Rob Portman of Ohio introduced a bill that would set up state and local grants aimed at reducing low-income evictions. Included in the bill is a measure to enhance data collection. Hepburn is hopeful that the bill could one day mean an easier job for those trying to analyse eviction data.

That said, Hepburn and Reichman caution against the public release of granular eviction data. 

“In a lot of cases, what this gets used for is for tenant screening services,” says Hepburn. “There are companies that go and collect these data and make them available to landlords to try to check and see if their potential tenants have been previously evicted, or even just filed against for eviction, without any sort of judgement.”

According to research by Eviction Lab principal Matthew Desmond and Tracey Shollenberger, who is now vice president of science at Harvard’s Center for Policing Equity, residents who have been evicted or even just filed against for eviction often have a much harder time finding equal-quality housing in the future. That coupled with evidence that evictions affect minority populations at disproportionate rates can lead to widening racial and economic gaps in neighborhoods.

While opening up raw data on evictions to the public would not be the best option, making timely, granular data available to researchers and government officials can improve the system’s ability to respond to potential eviction crises.

Data on current and historical evictions can help city officials spot trends in who is getting evicted and who is doing the evicting. It can help inform new housing policy and reform old housing policies that may put more vulnerable citizens at undue risk.

Hepburn says that the Eviction Lab is currently working, in part with the ACLU, on research that shows the extent to which Black renters are disproportionately affected by the eviction crisis.

More broadly, says Hepburn, better data can help provide some oversight for a system which is largely unregulated.

“It's the Wild West, right? There's no right to representation. Defendants have no right to counsel. They're on their own here,” says Hepburn. “I mean, this is people losing their homes, and they're being processed in bulk very quickly by the system that has very little oversight, and that we know very little about.”

A 2018 report by the Philadelphia Mayor’s Taskforce on Eviction Prevention and Response found that of Philadelphia’s 22,500 eviction cases in 2016, tenants had legal representation in only 9% of them.

Included in Hepburn’s eviction data wishlist is an additional ask, something that is rarely included in any of the filings that the Eviction Lab and January Advisors have been poring over for years. He wants to know the relationship between money owed and monthly rent.

“At the individual level, if you were found to owe $1,500, was that on an apartment that's $1,500 a month? Or was it an apartment that's $500 a month? Because that makes a big difference in the story you're telling about the nature of the crisis, right? If you're letting somebody get three months behind that's different than evicting them immediately once they fall behind,” Hepburn says.

Now that the Eviction Tracking System has been out for a week, Hepburn says one of the next steps is to start reaching out to state and local governments to see if they can garner interest in the project. While he’s not ready to name any names just yet, he says that they’re already involved in talks with some interested parties.

*Correction: This story initially misidentified a jurisdiction that charges $10 to access an eviction filing. It is the state of Alabama, not the city of Atlanta. Also, at the time of publication, Peter Hepburn was an assistant professor at Rutgers, not an associate professor.

Alexandra Kanik is a data reporter at CityMetric.