The Conservatives’ conversion to industrial policy: Plasticene, not Damascene
Finally, it appears that the phrase ‘industrial policy’ is no longer banned in Westminster and Whitehall. Indeed, the Conservative government has even produced a green paper on ‘building our industrial policy’, suggesting a full-blooded conversion to many of the policies Labour has been pushing for years. The green paper even includes a mention of ‘regional’ approaches, a term which was virtually banned under David Cameron’s administration.
It is pleasing to see a recognition of the need for the UK to learn from the US’ Small Business Administration, a measure previously called for by Chuka Umunna when Labour’s Shadow Business Secretary. Likewise, it is encouraging to see a desire to ensure more relevant vocational qualifications and provide more and better apprenticeships - again, two Labour initiatives, this time included in the Husbands Review of Vocational Education and Training. The Green Paper also included recommendations to rebalance the economy across the country (funnily enough, pushed by Labour), including by improving the availability of business finance across the UK (previously advocated by - you guessed it - Labour).
However, the new strategy includes some gaping holes. There is no indication in the Green Paper of how the government’s professed conversion to promoting green energy can occur, when its seesawing approach to renewable energy and energy conservation has led many investors to abandon trying to support this nascent industry in Britain (not to mention the impact the legislative U-turns have had on jobs, especially in home insulation).
Similarly, trade unions appear to be almost entirely absent from the government’s vision, despite their well-evidenced role in promoting innovation, new working practices and workplace-based learning. It is all very well for the government to want to emulate Germany’s success when it comes to manufacturing, but it is disingenuous and short-sighted to fail to acknowledge the essential role that good industrial relations play in delivering that German success story.
And for all the green paper’s rhetoric on more localised approaches, aside from reference to metro mayors, combined authorities and the new growth and devolution deals, there appears to be virtually no commitment to provide local authorities with the powers they need to grow their local areas’ economies. Aside from reference to potential new devolution deals (which appear to depend on the government’s backdoors dealing rather than being part of a transparent process), the only clear suggested change for local government is the engagement of private sector expertise- something that many local authorities already engage with, but which others have used to the detriment of their populations.
Finally, the green paper is almost embarrassing in its failure to genuinely confront the elephant in the room – the lack of certainty following the Brexit vote and the government’s shambolic approach to our future relations with the EU. This was evident upon the green paper’s publication, but has become even clearer with the publication of the government’s white paper on Brexit.
It is all very well, for example, stating a commitment to nuclear research, when the government has prioritised pulling out of Euratom- something that even the most committed Brexiteer would have balked at- given the impact this could have on Britain’s existing world-class nuclear fusion research in Culham. Similarly, discussion of rebalancing our economy makes little sense when the long-term future of structural funds is so unclear- until now, virtually the only regional, needs-based pot of money available for local authorities to promote economic regeneration. Government could use the removal of structural funds to open a debate about reforming local government finance to better reflect intra- and inter-regional disparities. Instead, we seem to have text message deals being made between ministers and Conservative county council leaders, and only a very vague statement on the future following Structural Funds on page 114 of the Green Paper. Again, the roll-out of Smart Meters is quoted approvingly in the strategy, without mention of the fact that it was supported by the European Investment Bank (nor of some of the problems the programme has encountered). And of course, it is pleasing to see the government finally focusing on trying to promote manufacturing, especially automotive industry, yet disturbing to see a lack of recognition of the damage currently being wreaked on that sector by the government’s approach to the Brexit negotiations. One wonders how that sector will be able to produce a new so-called ‘Sector Deal’, including a consideration of ‘helping address market access barriers with other countries’ (as it says on page 101 of the Green Paper), when its warnings about the impact of the government’s strategy on EU market access are currently being ignored by Number 10.
Without a stronger commitment to preserving our access to the single market and dealing with the funding gaps following Brexit, the government’s new conversion to industrial policy is more plasticene than Damascene.