Politics

The UK’s economy is naturally well-suited to semiconductor chip manufacturing. It has a technology-orientated service sector, an ability to produce advanced capital goods, powerful research and development capabilities, plenty of engineering and computer science graduates, and perhaps most importantly, it already has a developed semiconductor research and design industry. Despite this, the UK lacks an industry which actually manufactures semiconductors. At a time when Taiwan – the centre of world semiconductor chip manufacturing – seems increasingly under threat from China, the need for the West to develop its own semiconductor manufacturing industry is more pressing than before.

Semiconductors are the bedrock of modern technology, used from laptops through smartphones to highly-advanced medical equipment and supercomputers. Yet already, the UK has fallen behind in this race for developing the industry for manufacturing them. The United States fired the opening salvo with its CHIPS Act in 2022 which pledged $50 billion in subsidies for regrowing the domestic American semiconductor industry. This has already led to significant increases in investment in the industry, and large manufacturers such as Intel, TSMC and Micron developing new plants in the US. Likewise, France has invested €3 billion in a semiconductor plant, while Germany has secured deals with Intel and TSMC to build new plants in Magdeburg and Dresden on top of its €20 billion earmarked for subsidising the industry as a whole.

Indeed, what few domestic chip manufacturers there are have already threatened to move away from the UK. Pragmatic Semiconductors, a government-funded manufacturer, cited greater government support packages as a reason for considering a move abroad to the US. or the EU. IQE, another domestic company, has also considered a move abroad due to little government support. At the same time, Arm, a leading, well-known UK semiconductor manufacturer, chose to list on the New York Stock Exchange over the London Stock Exchange when going public last year.

Even this month, the Newport Wafer Fab – the UK’s largest chip manufacturer – was pawned to a US company two years after the government forced the Chinese firm Nexperia to sell it in 2022. Jobs have been lost and are predicted to continue to be lost as another overseas owner takes hold of the plant. No UK manufacturer stood up to buy the plant. This may be out of a lack of funding, but is probably because it simply does not make business sense in the current UK environment.

The solution is clear. The Government must start taking its semiconductor industry strategy seriously and allocate more support to manufacturers. With UK research and design capabilities already well-developed, and a high number of STEM graduates with knowledge of chip manufacturing producing a healthy marketplace of ideas, all that has to be done is for the Government to create a supportive environment for the sector. Besides job losses and a huge loss of potential as these graduates relocate to places with more government support, two fatal consequences will follow.

First, a lack of a home-grown semiconductor industry presents a national security concern, leaving the UK uninsulated from threats to its tech supply chains. Semiconductors go into just about every modern technology, and presently the UK is far too dependent on Taiwan to supply them. Should war break out between the People’s Republic of China and Taiwan, the tech-reliant UK economy could be devastated much like the economies of Europe were following the gas supply was cut off following the Russian Invasion of Ukraine.

Second, following fears that the UK financial sector could be adversely impacted by Brexit – examples of which are only beginning to materialise – it makes sense to diversify away from a sector built to work under the assumption of an unfettered movement of labour and capital with multiple countries. Semiconductor manufacturing presents a new industry which would already be adapted to post-Brexit restrictions on labour and capital, unlike finance. Further, semiconductor manufacturing would help rebuild the UK’s damaged manufacturing sector and make use of the deep pool of talent and technological knowledge present in the UK workforce.

Until the Government starts putting actions behind their words, and implements a subsidisation strategy to rival that of similarly developed economies, Rishi Sunak’s plan to make the UK a ‘technology superpower’ will simply remain rhetorical flourish. Worse yet, until then the UK’s significant potential for technology manufacturing will continue to go unspent.

Jonas Balkus is a master’s student studying International Relations at the University of Oxford and a member of Bright Blue.

Views expressed in this article are those of the author, and not those of Bright Blue. [Image: LIGHTFIELD STUDIOS]

You hear the phrase ‘levelling up’ virtually all the time within British politics, and for good reasons. Not only do analyses consistently suggest that Britain is one of the most geographically unequal countries in Europe – with rich, Southern cities like London absorbing a massively greater share of investment than the deindustrialised North – but the average level of prosperity is not so good either. Economic conditions of the past decade have dealt a serious blow to British living standards, all thanks to a hellish combination of stagnating productivity, low growth and inflation. To give an idea, a Centre for Cities report identified that the average Brit would be as much as £10,200 richer today had income growth remained in line with pre-2010 levels. 

Prime Minister Rishi Sunak thinks he knows the answer to all of this: pour £13 billion into Northern infrastructure and businesses, in an effort to produce jobs and vitality, and problem solved. Sadly, it is not so simple.

First, a chronic lack of enterprise plagues the North of England. The most business-dense part of the country, London, has twice as many enterprises per capita as the least business-dense part: the North-East. Figuring out how to stimulate business activity therefore should form an integral part of any levelling up strategy. But will the Prime Minister’s vision accomplish this? The experience of other countries suggests, probably not. 

All we need to do is cast our eyes on Italy. After the Second World War, to combat enormous regional inequalities, Italy pursued very similar policies, transferring vast resources from the rich North to the poor South, amounting to about 1% of the nation’s GDP, every year from 1951 to 1992. By 2020, regional inequality had in fact widened, not fallen – as it turns out, shielding firms from competition through subsidies as well as guzzling money into inefficient infrastructure projects is no recipe for prosperity. Exemplary of that is Italy’s HS2-esque 440 kilometre freeway connecting Laino Borgo and Reggio Calabria, both in the South of Italy, hailed at the time of construction as a solution to economic stagnation. In the long run, the freeway has had no discernible impact on local growth.

What is more, proponents of levelling up have consistently neglected the bureaucratic monstrosity that is the British planning system, which has inhibited the construction of around 4.3 million homes since 1955. What is needed to truly level up the UK is to deregulate the planning system and permit a construction boom. This will perform two vital functions for levelling up.

To begin with, it will undo enormous economic constraints on our urban economies. By sustaining such expensive homes, the planning system makes moving into the cities  much harder. As workers cannot afford to reside in locations where they would be best able to fill job vacancies and enhance productivity, the economy suffers. The effect of this can be catastrophic. Economists Chang-Tai Hseih and Enrico Moretti found that, from 1964 to 2009, immobility of labour alone constrained aggregate economic growth in the US by an astounding 36%.  The North has struggled to adjust economically following the collapse of manufacturing and a country-wide economic shift towards services. Policies for meaningful deregulation should include devolving zoning regulations to local governments to allow more regulatory flexibility, rules stating that buildings complying with codes must be granted planning permission – expanding the existing system of Permitted Development Rights – and reducing the total area of protected greenbelt land.

Second, affordable housing should also have a profound socio-economic effect on the most disadvantaged in our society. The poverty rates in the North are well over 20% for most counties. But, when housing costs are removed, those rates fall by an average of 3.8%. Child poverty tells an even more depressing story – once housing costs are included, we find that, between 2014 and 2019, the Northern regions of England led the country in rising poverty levels among children, with the North East seeing as much as a 10% increase. The pandemic and subsequent cost of living crisis will have made the situation even worse. By reversing exorbitant housing costs through planning deregulation, we could make great strides towards alleviating some of the most pressing socio-economic issues within the UK, and in the North in particular. If that is not the point of levelling up, I do not know what is.

It is popular for pundits and politicians to prescribe government spending as a means of closing the vast gap between the English North and South; this characterises the current Government’s approach, but it fails to recognise the deep and abiding economic distortions produced by our planning system that are clearly holding back England’s most deprived areas.

Eben Macdonald  is a first year PPE student at Durham University.

Views expressed in this article are those of the author, and not those of Bright Blue.

The Prime Minister, Rishi Sunak, recently pledged to recruit and train 150 new judges to help streamline asylum appeals. This pledge was met with intense scrutiny from Lady Chief Justice Dame Sue Carr, highlighting that the deployment of judges should be “exclusively a matter for the judiciary”.

This is the second time in a matter of weeks that Carr has challenged the Government on their political promises, having also been outspoken about their assurance to grant blanket exonerations to all those convicted in the Post Office IT scandal. Likely threatened by the government’s narrative that courts could not deal with the Post Office caseload, she stated it was “simply not factually correct”. Whilst, the mass exoneration of those who are innocent seems moral, political interference with the judiciary system could be the start of a slippery slope.

As retired judge Isobel Plumstead said, “It will inevitably lead to pressure for action in respect of other findings in criminal cases where a sort of moral right to exoneration is urged.” There will inevitably be future cases where there has been a severe moral miscarriage of justice, and victims will seek parliamentary intervention citing the Post Office scandal as precedent. Once the precedent has been set, an emboldened parliament may feel there can be other ‘exceptional circumstances’ requiring their intervention. 

The doctrine of the separation of powers requires that principal institutions of the state-executive, legislature and judiciary remain divided and independent. Early-modern political thinkers, such as Montesquieu, outlined that the separation of powers prevents tyranny and protects liberty. If the politicians of the executive and legislature were to politicise and interfere with the judiciary, it could bring into question the impartiality and independence of the judiciary. Montesquieu threatened, “there is no liberty if the powers of judging is not separated from the legislative and executive.”

Examples of the perils of allowing the judiciary and executive to become more integrated can be illustrated by the challenges which have arisen with the US Supreme Court. The US system of selection relies on popular election, as Supreme Court judges run an election-style campaign to compete for a Presidential nomination. The nominee appears before the Senate which conducts a public hearing ahead of a vote on their confirmation. By contrast, UK Supreme Court candidates produce written applications and are interviewed by a select committee that judge candidates based on merit against job criteria.  Minimalising the influence of the Lord Chancellor in the process insulates the court from political pressure, compared to the US, where an influential presidential role in the process exposes the court to judges who have political affiliations. For instance, as President, Donald Trump appointed three judges to the Supreme Court, shifting the balance to a Republican-dominated and overly-politicised judiciary. The consequences of the less formal separation of powers is evidenced in comparing the UK’s 59% confidence rating with the US’s 25% confidence rating for their Supreme Court. Lessening the separation of powers in the UK could perhaps invoke a similar decline in trust as the public no longer perceives judges as impartial.

In the UK, the Constitutional Reform Act of 2005 introduced a clearer separation of powers. Responsible for the formation of the Supreme Court, its clarifications of the separation of powers were consigned to the back pages of Britain’s constitution under the dominant EU law. Following Brexit, the Act has been thrust back into the limelight, as the Conservatives have fought to diminish the power of the judiciary and reinterpret the limitation of their power as the executive. The Judicial Institute at UCL found that in 2020, 94% of the judiciary was concerned and 78% extremely concerned about the loss of respect the Government had for the judiciary.  Infamously, after four protestors were acquitted of criminal damage in 2022 following the toppling of the Edward Colton statue in Bristol, then Attorney General, Suella Braverman, referred the case for appeal. 

Fundamentally, the Government has quickly grown from a critic to an overt encroacher of judicial independence. A 2022 report by the All Party Parliamentary Group on Democracy and the Constitution (APPG) found seven instances where the Supreme Court had departed from its previous verdict and taken a position more palatable to the executive. Whilst this was only raised as a point of concern, the report did conclude that ministers had failed to act constitutionally in attacking judges. 

The APPG’s solutions to the interference of MPs suggest that statutory guidance should be provided to ministers on their constitutional duties towards the judiciary. A more thorough system which has greater influence in Parliament to prevent MPs from making unchecked comments about the judiciary. A moderate response requires a re-evaluation of the role of ministers who have disconnected themselves from their legal pasts and have proven unwilling to challenge the executive on the constraints of their power.

To mitigate against government’s encroachment into judicial affairs, the executive ought to work in collaboration with an independent body to ensure that roles do not become fused. Indeed, the creation of an impartial middleman to regulate commentary from both would be a positive step. This builds on the guidance offered by the APPG’s report, but an apolitical body without bias would prevent unnecessary abrasive interactions. Ministers can be critical but should be reminded that they cannot enforce how the judiciary conducts its business.

Felix Billar is undergoing work experience at Bright Blue. Views expressed in this article are those of the author, and not those of Bright Blue. [Image: Tingey Injury Law Firm]