Strategic investment that is essential for our future security

CHANCELLOR Jeremy Hunt’s plan to start making this country self-sufficient in semi-conductors, which The Mail on Sunday reveals today, is a good example of adult, responsible government.

It embodies several praiseworthy elements. It prepares us for a possible crisis over which we have no control should China in some way forcibly take over Taiwan, which has a huge share of world semi-conductor manufacture.

Plainly, it would be better if the free world managed to deter any such event. Much political, diplomatic and military planning is being devoted to securing the continuing freedom of Taiwan. But mighty despotisms, as Russia has shown, do not conform to normal rules of behaviour and we cannot go about assuming that no such disaster could take place.

Two recent convulsions, the first over Covid and the second over Ukraine, have served to warn all civilised countries that their apparently secure, stable societies are intensely vulnerable to shocks which previously seemed unlikely, even far-fetched. In such cases, serious investment in the essentials of modern world industry can never be a mistake.

It simultaneously protects us against the possibility of disastrous shortages in time of global chaos, and strengthens us against the inflationary dangers which invariably follow war, and especially war in energy-producing parts of the world.

British governments have for many years taken the view that any sort of industrial strategy is alien to our traditions, involving inexpertly ‘picking winners’ or in some way imposing excessive interference on the market. This would be all very well if it had been a resounding success as a policy. But, alas, the history of much recent British inventiveness, most notably the World Wide Web concept pioneered by Tim Berners-Lee, is that excellent British ideas end up being exploited by others abroad because nobody here is willing to put the necessary capital behind them.

Imagine if, for example, Google was a British-owned and Britishbased company, and if Silicon Valley was in the Thames Valley or the Trent Valley.

One of the undoubted advantages we have gained through Brexit is the far greater freedom to subsidise and encourage homegrown industry without running into EU competition laws. Much of the current scepticism about the value and purpose of Brexit would dissipate if government took more advantage of such freedoms. And of course the creation of safe, well-paid jobs which would follow would greatly boost the Government’s ‘levelling-up’ strategy.

Britain undoubtedly did very well through the switch from manufacturing to service industries over the past 30 years.

But the belief that a modern economy could rely totally on such industries is falling out of fashion, and the old view, that a serious manufacturing base, preferably owned and controlled here, is necessary for a stable and growing economy, is on the way back.

There are clear signs that Rishi Sunak’s government is taking a thoughtful strategic approach to the problems of the country, while recognising that it has much to do if it is to beat off the challenge from Sir Keir Starmer.

There has been a serious recognition, brought about by the stresses of the Ukraine war, that defence spending has fallen behind.

Recent efforts to get cross-Channel migration under control have also been designed to have a real and lasting impact.

The Chancellor’s ideas on semiconductors betoken an understanding in the Cabinet that, to stay in office, the Tories need to be driven by the practical needs of the nation and its people.

Such policies are not showy and do not immediately attract huge headlines. But, if pursued properly, they do make genuine changes for the better in the lives of British people. And this is a more promising way to win back votes than a dozen slick slogans or an army of spin-doctors.