Business leaders welcome new industrial strategy aimed at boosting productivity

Business secretary, Greg Clark MP.

UK industry and business groups have broadly welcomed today’s announcement of the government's long-awaited industrial strategy which aims to end the country’s productivity woes. 

Business secretary Greg Clark took centre stage launching the strategy in a white paper entitled Building a Britain fit for the future. The strategy has been described as the government's long-term vision to boost the economy, build on the country's strengths and embrace the opportunities of technological change.  

The 255-page white paper aims to provide a specific boost to the automotive, construction and life sciences industries and comes as the government announced it had secured a major strategic investment by life sciences company MSD. Work is also to continue ahead with other sectors on "transformative" sector deals.

Business secretary Greg Clark said: “The way we earn and live our lives as workers, citizens and consumers is being transformed by new technologies. The UK is well-placed to benefit from this new industrial revolution and we start from a position of significant strength. We have a thriving research and science base and are home to a wide range of innovative sectors, from advanced manufacturing and life sciences, to fintech and creative industries. The industrial strategy is an unashamedly ambitious vision for the future of our country, laying out how we tackle our productivity challenge, earn our way in the future, and improve living standards across the country." 

Also included in the strategy are "4 Grand Challenges" which will take advantage of global trends to put the UK at the "forefront of the industries of the future":

1. Artificial Intelligence
2. Clean Growth
3. Ageing Society
4. Future of Mobility 

Today’s announcement is a timely one for the government after it was forced to reveal that the Office for Budget Responsibility had severely downgraded its productivity growth forecasts for the UK prior to last week’s budget. Additionally, many leading economists expect that Brexit will set back productivity growth further as uncertainty grows on what sort of a deal the UK will get once it finally leaves the EU. However, the strategy has received support from industry leaders on the whole with many believing it’s a positive start to tackling productivity problems.

Matthew Farrow, executive director of the Environmental Industries Commission, said: “There is a lot to welcome in the strategy and most of the modern environmental touchstones are covered - the emphasis on innovation and clean growth, resources productivity and the circular economy and the need to enhance natural capital are all given much-needed prominence.  These are aims that require long term effort and consistency to achieve, and will mean managing trade-offs that will not always be popular. The environmental sector hopes that the government will back up the welcome announcements in the strategy with this sort of ongoing determination to see the detail through, and we look forward to working with ministers to deliver the clean growth, exports and employment that we all want to see.”

Will Gard, chair of the infrastructure group and head of construction, at independent UK law firm Burges Salmon, said: “Whilst not perhaps getting its fair share of attention in the budget last week, it is reassuring to see that infrastructure is selected by government as one of the key five foundations for a transformed economy in the Industrial Strategy white paper.  The importance of the construction sector to ensuring the delivery of the UK’s infrastructure is also recognised with the announcement of the Construction Sector Deal.  Thus far there are no surprises and these announcements were expected. The white paper has made a very encouraging start but much needs to be done by government in relation to the regulatory framework to underpin the ideas and policy.”

Paul Tremble, executive director, strategic growth at WSP, said: “Government has clearly listened to industry in developing this strategy. Focusing on outcomes, and articulating the plan around the UK’s core strengths, its people, businesses and ideas to address the structural issues the country faces, especially in terms of infrastructure and skills is the right approach. We welcome the shift from championing individual technologies to embracing and incentivising whole systems approach, and WSP looks forward to contributing its expertise in this realm to drive this agenda forwards.”

Tom Carpen, infrastructure and energy associate at planning consultancy Barton Willmore, said: “What is striking here is that rather than talking purely about the big picture economy, there’s a strong emphasis on collaboration and ‘people and places’ leading the way regionally. We can see that through targeted infrastructure investments of £31bn and funding for devolved powers through the new Transforming Cities Fund. What the strategy is doing is not just building on the pledges made in the Autumn Budget, but more importantly, echoing the recommendations that the National Infrastructure Commission set out in its report in October."

Others within the business sector remain more cautious and believe the announcement of the strategy is just the first step of many the government needs to take in order to be successful. While Labour feels the paper fails to address measures that are needed for the millions working in low productivity and wage sectors.

“Today's announcement must be the beginning of a strategic race, not a tactical sprint", said Carolyn Fairbairn, director general of the Confederation of British Industry. "And it needs to last. This is a time for consistency and determination, not perpetual change with the political winds,” said Fairbairn. 

Meanwhile, Rebecca Long-Bailey, Labour's shadow secretary for business, said the white paper included “re-announced policies and old spending commitments" and failed to provide certainty. "What detail there is concentrates on a few elite industries in which Britain already has an advantage, and will do nothing to help the millions of people who work in low productivity and low wage sectors such as retail, hospitality and social care, or those based outside the ‘Golden Triangle’ made up by London, Oxford and Cambridge," Long-Bailey added.

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