The British economy is “visibly uneven” and an industrial policy must be implemented to spread wealth creation, according to Greg Clark, the Minister for Business, Energy and Industrial Strategy.
This raises two questions. Is a Government-led industrial strategy likely to succeed? And, even if it does, will the North, including Yorkshire and Humber, finally get its fair share?
Please forgive my scepticism. The UK Government’s track record with industrial strategy is not conspicuously successful. Anyone who happened to be at the Labour party conference in Scarborough in 1963 would have heard then Prime Minister Harold Wilson deliver the now famous speech in which he said that a “new Britain” would need to be forged in the “white heat” of “scientific revolution”.
My memory of the following period is about the country’s inability to keep the lights on rather than stage a major technological advance.
Industrial policy is always at risk of being hijacked by political agendas and frustrated by vested interests, variously caricatured as Luddite industrial bosses with more interest in golf than science, or unions hell bent on ensuring the heap of rubble left is perfectly level.
Looking at the Government’s recent Green Paper it does at least appear that some lessons have been learned – and that hope springs eternal.
Back in the 1960s Wilson did establish a Ministry for Education and Science but is generally thought to have failed to deliver his vision set out at the Scarborough conference.
Over recent years there has been progress in building links between our research universities, industry and commerce – one of the key requirements in building a future based on science, technology and innovation.
The Russell Group of Universities, in its report, Engines of Growth, identified £21bn of economic benefits from a sample of research projects at the universities, which they report as a return of £100 for every £1 invested.
Some of this progress has been prompted by government intervention, some by the higher education sector itself and some by the needs of industry. That essentially is the combination required.
The government’s role should be to frame legislation, economic policies and establish trading relationships that enable industry to prosper and also to provide funding stimulus where there is an agreed need.
Some of its successful measures which should be continued and expanded include Research and Development (R&D), tax credits and the Enterprise Investment Schemes, which give tax relief on investments into small, high growth potential businesses.
One major focus in the Green Paper is on making the UK one of the best places in the world to start or grow a business. In an age when it’s never been easier to set up a business and reach customers, this is the correct focus.
The trap to avoid is seeking to prop up uncompetitive industries and resorting to subsidies and protectionism.
The Green Paper sets out ten pillars on which industrial strategy will be built, including investing in science research and innovation, developing skills, upgrading infrastructure and driving growth across the whole economy, writes Jonathan Oxley.
There is a clear case for the Government interfering to ensure that development in the North is kick-started.
London is one of the world’s major trading centres. It is the rest of the country, in particular the North, that needs help in realising its potential.
This help needs to be enabling, to include funding for both hard and soft infrastructure, and sufficient devolution to enable the enormous talent and resources in the North to get on with doing what needs to be done in the way they know how to do it that finally lights our technological revolution.