Protectionism is bad when Trump does it – so why is it so often welcomed by British cities?

Protectionist in chief, Donald J. Trump. Image: Getty.

Do we stand on the verge of a new trade war? In light of competition from elsewhere, the drawbridge is being pulled up to shelter local industry from these malevolent foreign forces. And that, argue some policy makers, is going to help keep money in the economy and create jobs.

I’m not talking about Donald Trump, steel and whiskey. I’m talking instead about the idea of councils buying their goods and services locally, an idea that has been dubbed ‘Corbynomics’ and has Preston as its poster child. But the parallels are striking.

In recent years Preston City Council in particular has been active in increasing its spend on local businesses, giving them preference over suppliers from elsewhere. This has brought both curiosity from some policy makers and strong support from others, with John McDonnell describing this brand of ‘municipal socialism’ as the kind of radicalism needed across the country.

What is curious though is how differently policies promoting protectionism are viewed at the local and national level. The lines against international trade barriers are well rehearsed, and Donald Trump has been roundly criticised for his approach, with even his economic advisor quitting over it. And yet paradoxically protectionism is welcomed at the local level, somehow viewed as a defence for small businesses rather than the same politics of populism.


The same applies to the idea of local currencies. There are a number of local currencies in the UK, such as the Exeter and Bristol (tagline “Our city. Our money”) and pounds. The principle is that they support independent businesses by encouraging people to shop locally – in a war of David (local independents) versus Goliath (big national or multinational companies), it is argued that these policies help level the playing field. Of course, this is exactly the argument that Trump makes about US steel (David) and China (Goliath).

The struggles of the US steel industry are unlikely to be down to unfair trade practices, nor the deluge of cheap Chinese products. (Chinese steel accounts for just 2 per cent of all steel imports into the USA.) Similarly, the challenges that weaker city economies face have little to do with local authorities spending their budgets with companies outside their areas, nor people choosing to buy from Amazon rather than their local high street. Instead these struggles are caused by the ability of places to attract high-skilled investment into their economies, and the ability of these businesses to ‘export’ their wares to a regional, national or international market. This is caused by a number of issues, of which low skills of the workforce is chief amongst them.

So as US trade tariffs have been criticised by many, we must also view protectionist policies at the local level in light of the same criticism. Successful cities are ones that are open to business, irrespective of where these businesses are based. We should be encouraging them to increase trade, not shut it down.

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

You can hear him discuss these issues on a recent episode of Skylines, the CityMetric podcast.

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Meet the Sheffield social enterprise using shipping containers to tackle the housing crisis

A shipping container, repurposed as housing. Image: REACH.

A Sheffield-based social enterprise is hoping to navigate the rocky waters of the UK housing market, by creating affordable 1, 2 and 3-bedroom homes from shipping containers.

Inspired by an episode of Grand Designs, former police officer Jon Johnson set up REACH – Recycled, Environmental, Affordable Container Homes – in January 2017. Following a small grant from charity UnLtd, the social enterprise built a prototype which it is currently showing off to interested parties from around the UK. Johnson believes it can build 6,000 units a year, helping to plug the housing shortfall and creating genuinely affordable homes.

Just 1.4 per cent of homes in large developments approved by planners in Sheffield in 2016 and 2017 met the government’s affordable definition. In Manchester, it was literally none..

“We need to build the houses people want, where they want them, rather than what developers can bully through,” says Johnson. “I’ve got 40 or 50 housing reports. Are we going to keep writing reports or are we going to do something about it?”

During Johnson’s almost 30-year career in the police force, he saw first-hand the effects that insecure and poor-quality housing can have on communities in Britain. “It underpins everything in society. Everybody needs somewhere to live,” he says. “And if you haven’t got a decent place to be, that is adding to mental or health problems. You're onto a loser from the outset.”


“Decent housing is a human right like air and water,” he goes on. “It’s always been done to us by people who don’t care about standards or quality as long as they’re making money.”

Johnson used skills learnt through his furniture recycling store, Strip the Willow, to decorate the prototype, and sourced every bit of second-hand wood he used locally. The panelling used to be a counter in a local Indian takeaway, the cladding on the roof came from a local mosque. The bedroom headboard is made out of a piano, and light fittings are made out of cymbals.

Each of his eco homes will be 60 per cent recycled, built offsite in three weeks and powered by renewable energy sources. “We aim to make use of million tons of waste we put into landfill every year,” he says.

Changing the playing field

But followers of the UK housing market will be unsurprised when Johnson says there are vested interests and serious obstacles to overcome before REACH can achieve its dream of turning a cottage industry something more substantial.

“The same people will just keep profiteering out of everyone else’s misery,” he says. “We're trying to do housing the right way. It’s about people and planet, not just profit. Housing shouldn't be about giving out millions in bonuses at end of the year.”

But REACH won't be able to build any homes without land – perhaps the biggest hurdle for them to get over.

Following the Second World War, the government freed up land and built prefab housing estates around the country. Johnson believes a similarly bold approach is needed to meet the housing demands of the 21st century.

However, the publication of the social housing green paper last week made no promises to build more social housing. It “doesn’t commit a single extra penny towards building the social homes that are desperately needed,” said housing charity Shelter.

Frustration with this situation led Johnson to set up the National Federation of Affordable Building (NFAB), which brings together organisations from across the offsite construction sector who all would like to see a change in policy. “The reason we set up NFAB was because so many SMEs have had conversations with Homes England and got nowhere.”

The current Homes England system for listing land means building companies need to have a turnover of £50m before they can even be considered for public land – a bidding process that excludes all SMEs such as REACH.

REACH does have backing from the Local Government Assocation, though. It also has Sheffield City Council on board, and is hoping the council will soon be given a piece of land to build the first nine homes, freeing up funds for its first off-site factory.

It's clear that it’s going to take some forward-thinking councils for it to succeed. “We need a Dunkirk style situation with SMEs getting some innovation into the market,” Johnson says. “The issue of land and how much its worth is entirely notional. Land is expensive because people think it is.

“If Homes England can ringfence a percentage of the land they give to the big builders every year, and have that for affordable development, we won’t have a problem because the SMEs will have somewhere to access the market instead of queueing up for massively expensive land.”

At the moment, he notes, “Big builders don’t want to do things any differently because they're protectionist of their profit margins. SMEs can’t get a look in. We need to alter that playing field.”

A sustainable trend?

One popular misconception of homes made from shipping containers is that they are too cold in winter and uncomfortably hot in summer. Some critics also suggest that say the current trend for modular housing is a fad.

But Johnson says that residents will need the heating on for only two months a year: the homes are designed using ‘Passivhaus’ principles, which optimises energy efficiency through its design.

“They are light and spacious,” he says. “It’s how we use the offset of parts of the containers. They are like adult Lego. We can use architectural glass and make some fabulous buildings.

“They’re affordable but they will look like architect-designed houses.”

The one, two and three bedroom models will be sold at £35,000, £65,000 and £90,000 respectively. There is already a large waiting list of people ready to move in once they've secured some land.

At present, “I don’t think it’s a trend,” Johnson admits. But “it will take over the market if it's done right. The tech has now caught up and modular housing can be controlled a lot more intelligently in the factory. It cuts down on construction costs, waste and theft of materials from sites. It makes the whole process of housebuilding a lot more efficient.

“It’s a once in a lifetime opportunity to get housing moving in the right direction and get sustainability on the agenda,” he concludes. “That’s not going to happen if we leave it to the big builders.”

Thomas Barrett is the editor of New Start magazine, where this story first appeared. He tweets as @tbarrettwrites.

All images courtesy of the author/REACH.