Failure of renewables to boost Scotland’s manufacturing industry is massive own goal, writes Brian Wilson
There has been much publicity this week around the installation of the world’s most powerful wind turbine at the European Offshore Wind Deployment Centre off the Aberdeen coast, mainly celebrating the fact that it signifies defeat for Donald Trump.
That episode is history and deserves to become the classic parable of thieves falling out. Of more current interest should be the question: “Where was this wondrous structure manufactured?”. The answer, of course, is Denmark, a fact buried in the smallest of print amidst the self-congratulation.
Scottish Renewables – an industry-funded lobby group – enthused: “As the windiest country in Europe with some of the deepest water, we should be proud of Scotland’s burgeoning wind industry.” An alternative version might read: “As the windiest country in Europe, we should be angry and embarrassed that every single turbine around us has been imported.”
The energy companies – notably Scottish Power/Iberdrola and SSE – have managed to slither out of manufacturing in Scotland on the grounds that the facilities did not exist, while the facilities do not exist because no multinational was prepared to invest in them, in the absence of any imperative to do so. It is the job of government to break this kind of impasse and that is where failure has lain.
At present, life and death efforts are underway to entice an investor into BiFab in Fife, probably at great expense, in order to preserve even a small slice of the offshore market. I hope they succeed. But where was the forward planning that could have turned publicly owned sites in Fife and elsewhere into state-of-the-art facilities, able to compete effectively for major renewables contracts? Scotland was posted missing.
Indeed, the failure to turn Scotland’s renewables generation opportunity into a major regenerator of manufacturing industry is our biggest missed open goal of the century so far. It is also symptomatic of the fact that the Scottish Government appears devoid of any industrial strategy that extends beyond the manufacture of press releases and glossy brochures.
In February 2016, Scottish Enterprise produced a three -year masterplan called A Manufacturing Future for Scotland with all the usual ballyhoo. We are now more than two-thirds of the way through and not a lot more has been heard of it, apart from the promise of a National Manufacturing Institute – potentially a useful asset but still a nebulous concept and, on past form, one that might stay that way for some time to come. We are still waiting for the Scottish Investment Bank which has been announced more often than Leonard Cohen had farewell tours.
Twenty years ago, as Scottish industry minister prior to devolution, I visited Japan and Taiwan when inward investment from these countries was all the rage.
As I shuttled from one corporate headquarters to the next, I was made uncomfortably aware that these companies had invested in the UK largely because of Tory policies which made it the easiest and cheapest place in the EU to get rid of people when the need arose. Plus, of course, the generous grants which Scotland was able to offer.
It was an unsustainable strategy because, of course, somewhere cheaper always emerges. But at least it was a strategy which – for a couple of decades – created tens of thousands of manufacturing jobs and, when most of these companies departed, they left behind a legacy of indigenous spin-offs, many of which continue to survive and flourish. What, by comparison, is the strategy today?
There are, of course, fine companies doing all sorts of clever and useful things. Over the past couple of decades, for example, the games industry in Dundee, life sciences around Inverness, and digital firms in Glasgow and Edinburgh have grown strong roots. The gaping hole in the middle is manufacturing – in other words, decently-paid jobs based around actually making things. That is why renewables could have been so important. This week the First Minister visited China as all First Ministers do. She admired the Forbidden City, ate smoked salmon, shook hands with some functionary of the Chinese government and, rather mysteriously, launched a video called Scotland is Now, which must have had the Chinese reaching for their phrase books.
However, the threadbare nature of Ms Sturgeon’s itinerary highlighted the fact that this really is going through the motions. Apart from the apparently inexhaustible supply of Chinese students to support the creaking coffers of Scotland’s universities, there was not a lot to announce. If you check the Scottish Government’s own figures, there are ten Chinese companies in Scotland, employing 1,800 people. We sell more to Yorkshire than to China.
That is not an argument against doing our best in China or anywhere else. But, as the “£10 billion Chinese investment in Scotland” fiasco demonstrated, it is dangerous for the wish to overwhelm the reality. In that case, the Scottish Government was suckered into believing in a bottomless pit of Chinese money to fund its schemes, with spare change left over. In fact, all their potential partners owned was a pub.
For a while, another Scottish Government minister who is no stranger to the over-egged press release, Humza Yousaf, was commuting to Qatar in search of great wealth which was to be bestowed upon the Scottish economy. That didn’t happen either. In the tough world of international trade and investment, there are no golden bullets.
Closer to home, the UK Government has published an industrial strategy which placed heavy emphasis on working with nations and regions to build on existing strengths, and specifically, collaborating with the devolved governments. It is a serious piece of work backed up by substantial resources and warmly welcomed by a wide range of organisations, including Universities Scotland and the Scottish Council for Development and Industry.
They called for clarity in the divisions of responsibility and close co-operation in delivering shared objectives. In the absence of any better ideas, and however counter-intuitive it may be, the Scottish Government should accept that the UK framework probably offers the best available option for delivering an industrial strategy worthy of the name. There might even be time left to build a few wind turbines.