After predicting a hung Parliament in the 2015 election I rightly avoided any prediction of EU referendum result or US election. Sadly I decided that autumn statement predictions were safer territory and confidently predicted that this week the government would publish a green paper on corporate governance reforms and a new industrial strategy. As soon as I pressed "publish" for my prediction I started hearing rumours that both were delayed.
I was therefore heartened that in her CBI speech yesterday Theresa May did sketch out quite a bit of detail of what the industrial strategy will cover (when it is eventually published – today I was assured it would be before Christmas).
The Prime Minister listed the industrial sectors which the government sees as UK strengths which should be supported: -
robotics, artificial intelligence, and quantum computing.
professional services from architecture to accountancy, law to consulting.
financial services –including banking, investment management and insurance too.
This is a good list of UK strengths – although food and drink and perhaps energy / low carbon are two areas of export potential missing from it.
Theresa May also made clear that this would be a green paper - government is consulting (in listening mode) before finalising the strategy. And on timing, it will be published before the end of the year - and a white paper with final plans will be published early in the new year.
The green paper will seek to address the following long-term, structural challenges in order to unlock UK potential:
research and ideas developed in UK end up being commercialized elsewhere.
fast-growing firms can’t get the patient long-term capital investment they require, and have to sell-out to overseas investors to access the finance they need.
overall business and government investment remains lower than our competitors. (note reference to government as well as business)
economic success is still too unbalanced and focused on London and the south east.
we are not strong enough in STEM subjects, and our technical education isn’t good enough.
And - crucially - UK productivity is still too low
None of this is new – these issues have regularly featured in every ‘competiveness white paper’ I can remember since I worked for Michael Heseltine at the Department of trade and industry in the early 1990s. But what may be new is the comprehensive nature of this approach – bringing together regional, sectoral and ‘horizontal’ (skills, finance etc.) policies in one place. A Whitehall insider described it to me today as the master plan for the Department for Business Energy and Industrial Strategy.
Taken together with the forthcoming green paper on corporate governance this should start to provide a clearer vision of how the government proposes to shape the post-Brexit economy. First they just need to publish these green papers….
Theresa May is right to revive our industrial strategy, but good intentions must be matched by firm policies