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23/01/2017

Businesses could make deals with government in new industrial strategy

Words: Laura Edgar
Prime Minister Theresa May / Shutterstock

Prime Minister Theresa May has published proposals for a ‘modern industrial strategy’ that could see businesses make deals with the government to address sector-specific problems.

The strategy aims to “build on Britain’s strengths and tackle its underlying weaknesses to secure a future as a competitive, global nation”.

It seeks to drive growth across the nations and create more high skilled, high paid jobs and opportunities.

At the heart of the strategy green paper, according to the government, is an offer to businesses to strike new sector deals.

The deals could see companies benefit from a range of support, including addressing regulatory barriers to innovation and growth and looking at how trade and investment deals can be used to increase exports. New institutions could be created to provide leadership, support innovation or boost skills.

The government said the strategy is a “vital part” of the plan for Britain's exit from the European Union, set out by May last week.

The green paper also includes plans to strengthen institutions in each part of the country to support their specific strengths, be that building up local trade bodies, creating new education institutions or making accessing finance outside London easier.

Speaking at a cabinet meeting in the North West today (23 January), May said that a truly modern British industrial strategy must make Britain a hive of new industries that will challenge the companies and industries of today.

“The modern industrial strategy will back Britain for the long term: creating the conditions where successful businesses can emerge and grow, and backing them to invest in the long-term future of our country,” May said.

“It 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.”

Businesses secretary Greg Clark added that the strategy would build on the UK’s strengths and “extend excellence into the future” as well as “close the gap between the the UK’s most productive companies, industries, places and people and the rest”.

“The modern industrial strategy will back Britain for the long term" - Theresa May

In addition, the green paper sets out technologies where Britain has strengths in research and development, which could be supported through the government’s new Industrial Strategy Challenge Fund, such as smart energy technologies.

The strategy also outlines plans to upgrade the UK digital, energy, transport, water and flood defence infrastructure as well as to better align central government infrastructure investment with local growth priorities.

The government has invited businesses and workers to contribute to the strategy, including the Federation of Small Businesses (FSB) and the British Chambers of Commerce.

Mike Cherry, national chairman at the FSB, said the organisation is “pleased with the push on skills, infrastructure and connectivity as important drivers of productivity and industry”.

The Building our Industrial Strategy: green paper consultation can be found here.


Reaction


"The Industrial strategy marks a fundamental shift in the way the government approaches the economy and the country. We welcome many aspects of this new approach including the apparent recognition of the strong – but frequently ignored – links between infrastructure and housing, and the need to understand the well-being of different parts of the country. We will be examining the green paper in detail and making a response through our policy committee, which will incorporate the positions of the nations of the UK and English regions."

Richard Blyth, head of policy, RTPI


“The success of the industrial strategy will be judged on the extent to which it stimulates private sector investment in partnership with the public sector to deliver growth.

“The green paper is a good opportunity to think about barriers to growth and so we will want to feed in what challenges sometimes hold our sector back, such as overly complicated planning and tax systems.

“The impetus is on local authorities to become more self-sufficient and, particularly in this period of uncertainty, their ability to forge relationships with the real estate sector could provoke a seismic shift in the way much needed development is brought forward. More local authorities should be able to offer a context for investment that will demonstrate scope for economic growth, encouraging our industry’s investors to collaborate and make this growth a reality, and central government must do everything it can to stimulate this.

“The planning system is only as good as the resourcing it has from local authorities, and closing that resource gap is something that must be debated and addressed in the forthcoming housing white paper, if it is not to negatively impact on the country’s development pipeline.”

Melanie Leech, chief executive at the British Property Federation


“The Prime Minster has taken a bold step by focussing specifically on innovative new industries where the UK is leading the world, and which are challenging the old order. That’s exactly what our wind, wave and tidal energy industries are doing by delivering affordable energy and clean growth – key pillars which Theresa May has set out in her bold vision for modern Britain.

“Our offshore wind and marine energy industries are the envy of the rest of the world, with economic benefits being reaped around the UK from the shipyards of Liverpool to the banks of the Humber to the waters of Orkney. The global renewable energy market is worth $290bn a year, so it’s crucial that the final Industrial Strategy provides a strong sector deal for our wind and marine technologies.

“Energy costs are crucial for all industries, so as this reboot for Britain takes shape, with renewable energy now a mainstream power source, we need to maximise the benefits we all get from the investments that have been made in modernising the way we generate electricity. This means that onshore wind has a key role to play in our future energy mix, as it’s the cheapest form of new power for Britain”.

Emma Pinchbeck, executive director, RenewableUK


“It is great to see the government committing to addressing productivity and economic imbalances through an active industrial strategy, but we’ve seen these sorts of industrial strategies and growth strategies come and go over very short periods of time for the last six decades or more. The really important thing is that we get a commitment to a certain approach to industrial investment and change over the very long term. It is vital that with this new strategy the government does its best to get cross party agreement, and really commit to the long term.

“The thing that absolutely drives the productivity of a country is the inherent creativity and entrepreneurialism of its people, so while what the government is announcing today – big investment and big infrastructure and university research funding – is of course absolutely vital, they also have to work really closely with local government to drive the sorts of creative and innovative places that will turn the UK into the really competitive nation it needs to be in this post-Brexit era.”

Adam Lent, director at the New Local Government Network


Image credit | Shuttershock

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