Financial Times

Lukewarm welcome for May’s pledge to nurture ‘world-leading’ industries

by Jim Pickard, Peggy Hollinger & Sarah Gordon, Financial Times

January 24, 2017 | 2:11 pm
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Theresa May’s promise to bolster Britain’s “world-leading” industries through a new industrial strategy was met with faint praise from business leaders amid claims it was little more than a sprawling discussion paper.

British Chambers of Commerce called the strategy a “first milestone” while UK Steel described it as an “important first step”.

Launching the discussion document yesterday, the prime minister promised to tackle the UK’s poor labour prod­uctivity, improve access to capital and cultivate “world-leading” sectors.

Mrs May sees her industrial strategy as a way to prove her government is focused on a reformist policy agenda despite the distraction of Brexit.

But much of the content within the 132-page paper was a recap of existing government programmes, initiatives and funding streams.

The green paper contained some new policies, including a review aimed at cutting the cost of decarbonising the power and industrial sectors. That is likely to include reductions in subsidies for offshore wind energy.

There will also be a Cabinet Office review to decide if some government agencies and “cultural institutions” should be relocated to help reinforce “local clusters”. The paper suggested ministers would develop a more strategic approach to inward investment and work with behavioural insight experts to identify potential exporters.

The reaction from business leaders to the green paper was politely lukewarm. Terry Scuoler, head of the EEF, the trade body for manufacturing companies, said: “The jury is still out.” He said its main significance was that it was spearheaded by the prime minister.

Carolyn Fairbairn, director-general of the CBI, said it was better to have an industrial strategy than not, given that state spending accounted for 43 per cent of gross domestic product. “We need to have a plan of how we invest that money,” she said.

Mrs May’s strategy is the latest in a string of government attempts to influence business over the decades. Greg Clark, business secretary, said ministers would try to help “new and growing enterprises” unlike the flawed plans of the 1970s, which propped up existing industries. “Too often they became strategies of incumbency,” he said.

 

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by Jim Pickard, Peggy Hollinger & Sarah Gordon, Financial Times

January 24, 2017 | 2:11 pm
  |     |     |   Start Conversation

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