Foundation puts it, Britain “shouldn’t try to be Germany but a better version of Britain”. That does not mean giving up on manufacturing. Britain still has strengths, such as in making planes and pharmaceuticals. Richard Jones from the University of Manchester points out that these sectors have historically shown particularly high productivity growth. Manufacturing and services can also go hand in hand. Having an industrial base supports high-end services like engineering and product design. But this justifies a focus on niches, not a broad-based attempt to prop up failing steel mills and train factories. A common criticism of doubling down on services is that it neglects northern industrial heartlands which are less able to thrive in such an economy. Leeds shows this is not true. The northern city used to be a textiles town. As late as 1981, nearly 30% of workers were in manufacturing. Now only 5% are. Despite this, Leeds is thriving. Former spinning mills house tech firms and video studios. GDP per person is a fifth higher than the national average. Mr Burnham’s political base of Manchester is another example of how cities that embrace knowledge-based services can prosper (see chart 3). Improving
transport connections from outlying towns to bustling centres will help those in labour-market deserts access new opportunities. That is a better bet than relying on factories for future jobs. The highest-performing sectors hire the fewest people, and further productivity improvements will probably entail more automation. State-of-the-art factories might make Sheffield more prosperous but they won’t stop its steelworkers from becoming strippers. The final redoubt for the reindustrialisers’ cause is national security. Britain’s reliance on foreign parts, whether Chinese wind turbines or Taiwanese semiconductors, leaves the country vulnerable. Other countries can use vital supplies as leverage; even close allies will prioritise themselves in a crisis. In limited cases (such as the nuclear deterrent) building more at home has merit. But applied too widely this logic makes Britain less secure, not more. The country lacks the scale of China or America; it accounts for only 2% of global manufacturing. It cannot make everything. If it tried, it would make many things badly. Better to build on existing strengths in critical industries like aerospace and cultivate a range of suppliers for the products it makes poorly, such as steel. Mr Burnham has been vague enough about “reindustrialisation” that he has room to turn it into a credible programme. This would mean including knowledge-intensive services in the definition, and pursuing policies to support them, whether on migration or trade. He could embrace easy wins on manufacturing like faster planning and lower industrial energy prices in areas where electricity is cheaper to produce. But problems will arise if the prime minister gives in to the temptation to prop up dying factories. Direct subsidies (as with steel) or promises to buy poor-value British products (as with trains) will drain the exchequer of cash it can scarcely afford. Harking back to Britain’s manufacturing past risks distracting the government from today’s tasks. That’s dangerous nostalgia, not good old common sense. ■ This article was downloaded by zlibrary from https://www.economist.com/britain/2026/08/27/british-politicians-want-a- manufacturing-jobs-boom
Steelyard blues Reversing the long decline of a traditional manufacturing industry is hard to do Aug 27th 2026 THERE CAN be few more romantic examples of heavy manufacturing than Tata Steel’s hot rolled-strip mill at Port Talbot in south Wales. Red-hot bars pass through ancient machines in an almost mile-long 1950s factory, to be turned into steel coils that are loaded onto old rail wagons. Scattered around the huge site are rusting steel plants, amid which a state-of-the-art electric arc furnace (EAF) is being built to catch up with competitors. It is an evocative spot to ponder the idea of reindustrialisation promoted by Andy Burnham, the newish prime minister.
The steel industry in Britain has been declining for decades. Annual crude- steel output has fallen from almost 30m tonnes in the early 1970s to less than 3m tonnes today. Direct employment has shrunk from around 320,000 to barely 30,000 (see chart). Steel output and employment have fallen in America and Europe too, but more slowly. High energy costs are widely blamed. But the biggest culprit is China, which produces over 1bn tonnes of steel a year, more than half of total world output, much of it dumped on global markets at below cost. Pursuing anti-dumping cases against China for breaking World Trade Organisation rules is tricky, so the more usual defence is counter-subsidies, tariffs and quotas. Donald Trump led the way with tariffs on American steel imports in 2018. Now it is the turn of Britain and the European Union. In early July both halved their tariff-free quotas of steel imports and doubled tariffs to 50% above those levels. Britain and the EU chose to apply these tariffs to each other, a decision David Bailey of Birmingham University calls “madness”. This especially hurts Britain, which exports over 70% of its steel to the EU. Mutual tariffs and quotas will not curb annual global overcapacity, which the OECD, a think-tank, expects to rise to 721m tonnes in 2027. Tariffs impose costs on steel users, who outnumber steel producers by over ten to one and claim they
cannot get the quality of steel they need from domestic sources. Northern Ireland, which is part of the EU goods market, may even end up liable to pay both EU and British tariffs. Britain and the EU would do better to co-operate. Under the post-Brexit “reset” the two plan full free trade in food, which could be a model for steel. Both could do more to promote green steel, since they apply the same environmental rules. In Britain that points to closing the country’s last two blast furnaces, run by a newly renationalised British Steel in Scunthorpe. The future, as Gareth Stace of the lobby group UK Steel concedes, lies with EAFs that are cheaper to run and emit less carbon. These use as their raw material scrap steel, of which Britain produces a large annual surplus of over 10m tonnes, not iron ore. Traditionalists complain that if Britain loses its last blast furnaces it will be the only G7 country left with no primary producer of virgin steel. This, it is said, is a big risk to the country’s security. Yet with more careful regulation of recyclers, the quality of steel produced by EAFs using scrap can be as good as virgin steel. And the security case is less persuasive given that primary producers rely on imported iron ore and coal, mostly from such faraway places as Australia or Brazil. There may be other reasons to help domestic steelmakers. Big steel firms are important job creators in deprived areas. And it may be a mistake to end up relying too much on China for steel. But Europe remains a big producer, as well as being far closer. Under its steel strategy the government is setting aside as much as £2.5bn ($3.4bn) during this parliament from its national wealth fund to subsidise the likes of British Steel and Tata, which is a lot for what is now a relatively small industry. Yet steel has powerful supporters. For decades British politicians have argued back and forth over nationalisation, privatisation and renationalisation of steel. Steel has historical links not just to specific regions but also to the Labour Party and trade unions. It might be sound economics to assert that Britain no longer has a divine right to be a big steel producer. But politics could yet sustain the romance of the industry for a few decades to come. ■ This article was downloaded by zlibrary from https://www.economist.com/britain/2026/08/27/steelyard-blues
Harry and Meghan are ghastly and back in Britain. Good Britain needs something to cheer it up. This will do Aug 27th 2026 The outrage was instant. When the return of Harry and Meghan to Britain was announced on August 19th, royal commentators had collective conniptions. The Sussexes’ return a week later (widely assumed to be caused by the cost of security abroad) has been called “selfish”, “foolish” and “childish”—all sorts of -ishes. Front pages have been filled, hands have been wrung. Everyone has, in short, been enjoying themselves tremendously. And the monarchy has been doing its job perfectly. Most people misunderstand the monarchy. There is a widely held idea that it is a branch of government and should, as Walter Bagehot, a Victorian writer (and editor of The Economist), put it, be “DIGNIFIED”. Bunkum. No
British monarch has truly governed anything since the 1689 Bill of Rights removed all real powers from the king and his “evil counsellors”. Since then the monarchy has become—as Hilary Mantel understood better—a branch of entertainment, not government. Royals, Mantel wrote, are like pandas in a zoo: some like them, some pity them, “everybody stares at them”. Meghan Markle, an actress who began in daytime TV, knows this well. The website IMDB lists “Deal or No Deal” (2005) as an early hit paying her “$800 per episode”. Next came a breakthrough part in a schlocky American mini-series, “Suits” (2012), “$50,000 per episode”; then the even bigger role of, as the website royal.uk notes, “The Duchess of Sussex, Countess of Dumbarton and Baroness Kilkeel” (2018- present), salary undisclosed. Despite her marriage, the show has gone on. And on, and on—for, like daytime TV, this spectacle has tended towards melodrama. There have been family feuds, baddies (Harry called Camilla a “villain”), spin-off series, which didn’t really go anywhere, and even a car chase, which didn’t really go anywhere either. Like many Netflix series it has all gone on for so long that no one can quite remember the plot. Something to do with a dog bowl? As the royal phrase has it: “Recollections may vary.” Far more memorable have been the reviews, which have been woeful. “Spare”, Prince Harry’s tell-all book, was widely panned. “Polo”, his Netflix series, was ridiculed. “With Love, Meghan”, her lifestyle show, has a score of 23% on Rotten Tomatoes, a reviews aggregator. On YouGov, a sort of British reviews aggregator, Meghan now has a popularity rating of 18%, far behind William (71%), Kate (65%) and even Camilla the “villain” (35%). Like other ill-fated royals (Marie Antoinette also liked a farm), Meghan has branched out into agriculture and, like other stars, merchandising. She has a lifestyle brand called “As Ever” that promises to “bring surprise and delight to your every day”. It will certainly bring surprise to whoever pays your grocery bill, as its raspberry spread costs $12 a jar. More surprising yet is its “Sage Honey” ($32). Best of all is “Raspberry Spread Trio”, which offers three jars of that $12 item for $42, thus bringing surprise not merely to bill- payers but to those versed in the usual principles of economies of scale.