London: The UK government will pick winning areas in the economy to champion as part of an industrial strategy aimed at boosting Britain’s productivity as the country prepares to leave the European Union.
Announcing the long-promised plan on Monday, Prime Minister Theresa May said she wanted to see “sector deals” to identify and address barriers to expansion in different industries. The government also aims to target areas where it thinks the UK could excel in the future, including biotechnology, artificial intelligence, and mobile networking. Ministers will hold a cabinet meeting in northwest England to emphasise their desire to help parts of the country that have sometimes be left behind by industrial shifts.
The strategy “will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success,” May said in an emailed statement.
May has placed the industrial strategy at the heart of her effort to define her government beyond Brexit. The plan, subject to a public consultation, aims to draw together policies on transport, education, telecommunications, energy and construction to ensure businesses have the skills, links and access to supplies needed to expand and diversify into new and growing industries such as renewable energy and robotics.
Future Economy
The strategy is “about the economy of the future, it’s about ensuring that business can grow and is encouraged to grow in the UK,” May said on Thursday in a television interview with Bloomberg News Editor-in-Chief John Micklethwait. “It’s also about ensuring that the benefits of prosperity are available across the whole country, we see that economic growth and prosperity for everyone.”
Among areas targeted for government help is technical education. May will announce 170 million pounds ($212 million) for new institutes, teaching science, technology, engineering and math, that will provide high-school graduates with the skills demanded by local employers. The prime minister also aims to boost teaching of those subjects in universities, as well as math in high schools.
“We know we’re going to have to compete and have the chance to compete with countries around the world,” Business Secretary Greg Clark said on Monday in a BBC television interview. “It’s an increasingly competitive world. You get no quarter if you’re not productive. We’re less productive than even our neighbours — France and Germany — for example, and that’s something we need to address.”
May’s focus on technical education is likely to please businesses. A survey released Saturday of 800 members of the Institute of Directors, a business lobbying group, found that their top policy priority is a long-term skills strategy, with three-quarters of companies saying it’s “very important.” Infrastructure improvements and better broadband were their second and third choices.
Single Market
May signalled on Tuesday that she aims to pull Britain out of the EU’s single market and customs union as part of two-year divorce process she plans to trigger by the end of March. The industrial plan and the stated desire to forge new trade deals with countries from the US to China are part of government efforts to demonstrate Britain is open for business and investment, even as it cuts ties with its closest neighbours.
The strategy will be based on what the government described as 10 “strategic pillars:”
Chancellor of the Exchequer Philip Hammond has already outlined spending on roads and broadband as well as a 23 billion-pound National Productivity Fund designed to spur growth. The nation’s economic output per hour has effectively stagnated for a decade, only returning to its pre-recession levels in October.
“The CBI has long called for a new industrial strategy and it’s welcome to see the Government creating an opportunity for all sectors to get involved,” Carolyn Fairbairn, Director-General of the business lobby, the Confederation of British Industry, said in a statement. “It must help fix the country’s productivity problems and remove the regional inequalities that have dogged our country for generations, having a positive impact on living standards, wages and the future opportunities of many people.”
Britain hasn’t had an explicit industrial strategy of the kind envisaged by May since Margaret Thatcher was in power in the 1980s. When she stood for leadership in July, May said her aim was to create “a proper industrial strategy to get the whole economy firing.” One of her first acts as leader was to unite the business and energy departments into a new Department for Business, Energy and Industrial Strategy.
