Home News Excellent in parts: Our verdict on the Industrial Strategy

Excellent in parts: Our verdict on the Industrial Strategy

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Industrial Strategy

You have to feel sorry for the Business Secretary Greg Clark. The long-awaited launch of his Industrial Strategy White Paper on Monday was upstaged by the announcement of Prince Harry’s wedding.

That hasn’t stopped us poring over the 255-page document.

Cumbria Chamber carried out a major consultation on the Industrial Strategy Green Paper, published in January, and subsequently tabled a 34-page response reflecting what Cumbrian businesses told us.

Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, said: “It’s pleasing to see that the Government has listened, particularly to what we said around training, the skills agenda and access to finance.

“They also underlined their commitment to the Growth Hub network for business support, which was pioneered in Cumbria by the Chamber.

“That said, we haven’t got everything we wanted. We think the Strategy underestimates the contribution of SMEs, for example.

“And while there is progress on a sector deal for nuclear, it’s disappointing that there is little emphasis on nuclear new build.”

He added: “Producing an Industrial Strategy is the easy part. It’s one thing to have a strategy but quite another to deliver it. That will be the acid test.”

In the foreword, Prime Minister Theresa May says that the Strategy “heralds a new approach to how government and business can work together”.

It identifies four “grand challenges” – artificial intelligence, mobility, clean growth and the ageing society – and outlines a response around five themes: ideas; people; infrastructure; the business environment; and places.

It’s one thing to have a strategy but quite another to deliver it. That will be the acid test.

Rob said: “It’s surprising, given that this is an Industrial Strategy, that these ‘grand challenges’ aren’t essentially challenges for business, in many ways they are issues facing society as whole.

“When we get down to the detail, the diagnosis of what is wrong with the UK economy is sound – weak productivity, growth concentrated on London, the need to export more – but we already knew these things.

“The Strategy tries hard to portray the UK as a global leader in new technologies. It claims artificial intelligence could add £232bn to the economy by 2030, and there’s a pledge to have self-driving cars on our roads by 2021.

“The word ‘innovation’ crops up an astonishing 502 times.

“I wonder if this is part of a strategy to make the UK an attractive place for technology businesses to invest after Brexit?

“The tone reminds me of [former Prime Minister] Harold Wilson’s famous 1963 speech where he talked about a “new Britain” forged in the “white heat” of “scientific revolution”. Maybe they are trying a bit too hard.”

He continued: “The Strategy makes the right noises about ensuring that ‘every part of the country realises its full potential’, which we hope means they will invest more in areas such as Cumbria – and other parts of the North – that haven’t had their fair share of infrastructure spending.

“There’s also a proposal to have Local Industrial Strategies which, in areas like Cumbria that don’t have elected mayors, would be led by the LEP.

Industrial Strategy“However, some of the figures quoted on infrastructure don’t match our experience. They talk about 95% of premises having superfast broadband by the end of this year, and 96% having 4G mobile coverage.

“Cumbria falls way short of that, and we suspect many other places do too. A recent survey by the comparison website cable.co.uk ranked the UK 31st for broadband speed, behind Bulgaria and Romania.

“The Strategy has some good ideas around commercialising research coming out of universities and a pledge to spend more on research and development, rising to 3% of GDP. We saw signs of the Government acting on this in the Budget, when they raised the R&D tax credit to encourage investment.

“But again some of the figures are questionable. For instance, they say that 400 businesses account for 75% of all R&D in the UK. That doesn’t accord with our experience, which is that SMEs are among the most innovative businesses.

“We’re pleased with what it says around skills and training. The emphasis on basic maths tuition, STEM subjects in general, reforms to boost status of vocational educational, and the retraining and reskilling of adults, all chime in  with what Cumbrian employers told us.

“One of the more interesting aspects is the concept of ‘sector deals’.

“These have been misinterpreted by some commentators. They are not about picking winners and protecting or subsidising particular industries. They are more about how government can work with businesses to remove barriers to growth, perhaps by alleviating skills shortages or making regulatory changes.

“We called for sector deals for nuclear, tourism, and food and drink – all vital for Cumbria’s economy – and of these only nuclear is sufficiently advanced to earn a mention in the Industrial Strategy.

“It’s disappointing that there appears to be little enthusiasm for nuclear new build beyond Hinkley Point in Somerset – there is no reference to Moorside in Cumbria or the Horizon project at Wylfa in Wales.

It’s disappointing that there appears to be little enthusiasm for nuclear new build.

“In this respect the Strategy is reminiscent of the Conservative manifesto at the last election, which talked about renewables and shale gas but not nuclear.

“We think this is flawed thinking, and certainly doesn’t make sense in the context of the support for electric cars expressed elsewhere in the Strategy.

“The National Grid has estimated that, in a worst-case scenario, peak demand for electricity could rise by 18 gigawatts by 2050 – that’s equivalent to more than five Moorside or Hinkley Point nuclear power plants.

“So overall, the Strategy is a bit like the proverbial curate’s egg – excellent in parts. Some of the things it talks about, such the Industrial Strategy Challenge Fund to boost innovation, we already knew about.

“Some of it is muddled thinking, but there are sensible and pragmatic ideas too. Perhaps we should be grateful that the Government is listening to and acting on what organisations like the Chamber are telling them, especially in view of the anti-business rhetoric we’ve heard from politicians of late.”

 

© Cumbria Chamber of Commerce

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