The government has finally got round to setting out an industrial strategy that it hopes will provide a clear, ambitious vision for wealth-creating sectors like manufacturing. It comes not a moment too soon: too frequently both the coalition and the previous Labour administration have been guilty of short-term thinking and of making decisions that affect the British economy in an ad hoc way. There is an overdue realisation that industry needs stability – and that comes from politicians making strategic plans and sticking to them.
So what to make of the strategy itself? Well, it would seem to have all the necessary constituent parts. The creation of a £1 billion government-backed “business bank” to help companies invest in capital and drive their expansion is most welcome. Time and again, access to finance is cited by manufacturers as one of the greatest hindrances to their growth. The details of how the bank will operate are still a bit sketchy, though, so there’s further work required to ensure that it becomes a meaningful initiative.
It’s also encouraging to see the government showing a willingness to “pick winners” through specific sector strategies in areas of advanced manufacturing such as aerospace, automotive and life sciences that it thinks have the greatest potential to drive economic growth. For too long there has been a timidity about politicians when it comes to admitting that some sectors have better prospects than others, and then backing them accordingly.
World-class skills matter too – and the pledging of £165 million to enable firms to design vocational training programmes to invest in young talent will be a valuable resource. Already big names including Siemens, Sembcorp and Nissan have signed up to the Employer Ownership Pilot, with some committing to radical proposals to train employees not just within their own company but also within their supply chains. Other commitments forming part of the strategy include a new innovation and knowledge centre to boost commercialisation of research, and reforming government procurement policy to provide businesses with greater certainty, giving them the confidence to take long-term investment decisions.
It’s all good, strong stuff – and business secretary Vince Cable gives the impression of a man determined to see swift and effective implementation. But therein lies a problem. The industrial strategy requires long-term commitment, and there’s no guarantee that the coalition will be around long enough to see it through. That’s why it’s crucial that it receives cross-party support. It would be naïve to think that the major political parties will always take the same approach in this area, but there surely needs to be some synergy on industrial issues to avoid the constant chopping and changing of policy that has dogged us for so many years. Industries need to have confidence that these incentives won’t be removed with a change of government.
In fairness, Cable alluded to that fact at the launch of the strategy when he said that many of the decisions we face, on banks, industrial policy, climate change, go way beyond the limitations of one party or one parliament. They will require politicians from across the spectrum to put aside their rivalries and take a more grown-up approach to the way they go about their business. But just how many of us think that is likely to happen?
- What are your thoughts? Leave your comments below.