Why the Industrial Strategy should have a future

October 25, 2019 | by Field Team

In this week's The Word From Westminster, Field’s Director Jake Sumner gives his take on the future of the Industrial Strategy. Jake was previously a Special Adviser in the Gordon Brown Government and Chief Adviser to the Shadow Business Secretary, covering Industrial Strategy.

Despite a turbulent political environment, the Industrial Strategy has been a welcome, stable mantra in politics for a while now. But is this now under threat from Johnson’s Government or a General Election?

Let’s recap on where we’ve got to. The Industrial Strategy is a long-term framework aligning government departments, industries, institutions, funding, procurement and R&D. Its purpose is to support key sectors, boost metrics and meet long-term transformative goals, currently called ‘Grand Challenges’.

Industrial Strategy hasn’t always found favour. Under Thatcher, it was out; too 1970s and interventionist. Under Blair, there was minor progress and activity accelerated under Brown with the creation of the Automotive Council, an innovation strategy and the Technology Strategy Board (now Innovate UK).

The Coalition Government built on this under Vince Cable as Business Secretary, for example by developing a well-regarded life sciences strategy. The language of Industrial Strategy was resuscitated, helped by the Labour Opposition championing a ‘Modern Industrial Strategy’. A consensus developed.

Under Theresa May Industrial Strategy became the economic mantra, with an Industrial Strategy Green and White Paper, and an enthusiastic Business Secretary, Greg Clark, doing sector deals and launching local industrial strategies. However, Since July, under Johnson, Greg Clark now doesn’t even have the Conservative whip, former Business Secretary Sajid Javid is Chancellor and Andrea Leadsom, not an obvious champion, is the Business Secretary. Johnson hasn’t mentioned Industrial Strategy once in his speeches, he’s backed by deregulating cheerleaders and Brexit has consumed all attention.

So, the omens aren’t rosy, but that verdict could be too hasty. Here are some reasons why:

First, Industrial Strategies are important. Every developed country has them. Scotland introduced one for the food and drink sector. Within a decade turnover increased 44% and exports grew 56%. The UK’s challenges of low productivity, poor skill levels and deployment, long tail of low productivity jobs and companies, regional inequalities and low export levels are still extant. Abandoning the Industrial Strategy won’t help.

Second, Local Industrial Strategies (LISs) are moving forward with more than 40 underway. Greater Manchester’s was launched in June. LISs increasingly feature in regional growth goals and the integration with transport and development plans. The new Devolution Bill will give new and existing devolved areas more powers, bringing more grist to LISs.

Third, alignment across Government and certainty for investment are still needed, arguably more so with Brexit. It is also critical to deliver net zero, which the Government is committed to. Positively, Ministers still talk about the Industrial Strategy, officials are still in post and it has support across business, trade unions and localities.

Fourth, progress on addressing the lack of institutions to support an Industrial Strategy, such as establishing the National Infrastructure Commission, means there are important voices advocating and taking forward.

Fifth, a key to the Industrial Strategy is addressing low R&D investment. Ministers are committed to increase this to 2.4% by 2027 and a new innovation strategy is currently expected this autumn.

As for Johnson, while he hasn’t talked about Industrial Strategy as PM, as London Mayor he used two Conservative conference speeches to champion the industrial benefits across the UK from long-term transport investment (in London). He’s a fan of infrastructure and science investment, pointing to a continued Industrial Strategy.

While different Governments and parties have different takes, the Industrial Strategy should continue. With the demands of the green transformation it is essential that it does.

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