Government must develop an industrial strategy for the 21st century

John Quinton Barber
24 November 2017

Twitter FacebookLinkedIn

Print

Topics 

Industrial Strategy

As the secretary of state for business, energy and industrial strategy, Greg Clark, prepares to launch the government’s industrial strategy proposals, John Quinton Barber looks at three key areas the government needs to address.

The launch of the government’s industrial strategy on 27 November marks the culmination of an 18-month process, which began when Theresa May was elevated to Number 10 and added industrial strategy’ to Greg Clark’s job title. 

That immediate refocussing of the role of the business secretary on Theresa May’s appointment as prime minister should tell you all you need to know about her backing for bespoke industrial policy – but if you need more convincing, try to dig out a copy of The Times from Monday 20 November and view the opinion piece headlined ‘My industrial strategy will build a Britain fit for the future’. Not ‘My government’s industrial strategy’ or ‘This industrial strategy’, but ‘My industrial strategy’. 

Those are the words of a prime minister who sees this industrial strategy as absolutely key for her government and is staking her political capital on its success. 

As the owner of a small, but rapidly growing, business, Social Communications, I welcome this focus from the prime minister. For a long time, industrial strategies were seen as things best left in the 1970s - documents that led to the production of the Austin Allegro and saw industrial winners and losers decided over beer and sandwiches in Number 10. 

However, an industrial strategy can mean so much more than that. Just look across the North Sea at our German cousins to see what a modern, effective industrial strategy can do for an economy. With a manufacturing sector running at 23% of GDP in 2016, in contrast with a meagre 11% in the UK, and productivity growth soaring ahead of the UK’s, Germany’s economic success, predicated on a strong, long-term industrial strategy, should provide us with much food for thought.

Taking into account the experience of successful European industrial strategies, I’d like to hear Greg Clark focus on three key areas. I truly believe investing time and resources into these three areas will have a profoundly positive impact on the UK’s economy, and provide a real foundation for businesses like Social Communications to continue to grow and develop in the years and decades to come.

Skills

The think tank IPPR North paints a gloomy picture of skills development in the UK. Research from this year suggests that in the last decade there has been an 11% increase in the proportion of the UK’s workforce with basic and degree-level qualifications, but this has only translated into a 1% growth in national productivity.

There are bright spots of course. Much fantastic work being done in terms of apprenticeships and vocational learning, such as at the National College for High Speed Rail.

However, an education and skills system which sees a workforce become better qualified, but productivity remain stagnant and real terms incomes drop, is a system which is fundamentally broken. Any successful industrial strategy needs to look closely at education and skills, to ensure that the United Kingdom has a workforce which can successfully compete in the 21st century’s global economy.

Infrastructure

Social Communications’ head office is in central Manchester. From there, a train journey to our Leeds city centre office takes at least 50 minutes. That is 50 minutes to travel a distance of 36 miles – an average speed of about 43 miles per hour between the two biggest cities in the north. That is not good enough.

When you look at other parts of the north, the situation is even more stark. To visit one of our clients, Bradford Council, my train from Manchester would barely break 30 mph. As one of the fastest growing cities in the north, with a young and vibrant population, Bradford could play a key role in the UK’s economy. But how can a city ever really contribute to the fullest when held back by such poor infrastructure.

The connections between Manchester and Leeds and Bradford are two examples of the substandard infrastructure operating in parts of the UK, but there are many more, north and south.

In the north, the government has established Transport for the North and is developing a plan for the new ‘Northern Powerhouse Rail’ line, connecting Leeds, Bradford, Manchester and Liverpool. This is a good start, and a truly successful industrial strategy will need to confirm this commitment to Northern Powerhouse Rail. But so much more needs to be done. To thrive, the UK needs a step change in infrastructure investment - not just in rail, but in road, telecoms, mass transit, energy and every other type of infrastructure which the UK depends on.

Housing

For many of my younger staff, housing is the defining issue of their generation. Earlier this year, the housing charity Shelter released research claiming that nearly eight out of ten families across England are unable to afford newly built homes in their local area. And with interest rates starting to climb upwards again, this problem of affordability is likely to get worse. 

The arguments around land banking, restrictive planning systems, brownfield v greenfield and every other aspect of housing have been rehearsed many times before, and will be many times again. These are not arguments for this article.

What I’m looking for, on Monday, is a vision for housing. A vision that offers a clear way forward, and offers my younger staff a light at the end of the tunnel. The budget this Wednesday spoke about housing, and some of the largest cheers came after Philip Hammond’s announcement on Stamp Duty relief for First Time Buyers. That was a welcome tweak, but that’s all it was, a tweak. For the UK’s economy to thrive, people need affordable housing. Whether that is housing in private ownership, privately rented or socially rented, people need somewhere to live.

Monday will be a big day for Theresa May’s government. I imagine she will be hoping that the launch of her industrial strategy kick starts her administration, and begins the process of recovering in the polls.

With a clear vision for skills, infrastructure and housing, she might just manage it.

John Quinton Barber is group managing director of Social Communications.