We asked our panel for their reactions to the government’s Industrial Strategy announced yesterday.
“Too little, too late” – Chi Onwurah MP, Shadow Minister for Industrial Strategy
The government’s Industrial Strategy – launched yesterday – comes 16 months into Theresa May’s premiership and seven long years after this Conservative government first took office. That’s seven years in which productivity has stagnated – despite the technological revolution all around us – and working people have seen wages fall and work become more insecure as prices rise.
Why, then, is it only now that the government is laying out what it calls the ‘first strategic actions of a long-term approach to transform our levels of productivity’?
The truth is that today’s White Paper is too little, too late. It contains few new ideas and even fewer substantial interventions, promising instead to set up a plethora of ‘reviews’, ‘commissions’ and ‘committees’. What new commitments it does contain are limited to a small handful of industries, and will do nothing to help the millions who work in low wage, low productivity sectors such as retail, hospitality and care.
The government claims in the White Paper that “we are ready to be judged on our performance”. After seven years of austerity economics, their performance is written in the queues outside every foodbank in the land. This Industrial Strategy will not change that.
“Small steps, but still weak on worker voice” – John Earls, Head of Research, Unite the Union
While it’s essential that trade unions must be involved in any proposed ‘sector deals’, worker voice and collective bargaining were absent from April’s Industrial Strategy Green Paper. So how does yesterday’s White Paper measure up?
The Industrial Strategy White Paper announces four sector deals with others said to be “in advanced discussions”. No reference is made to trade unions, although there is some reference to ‘workers’.
Trade unions (through the TUC) are acknowledged, however, in respect of the ‘National Retraining Partnership’ that will set the strategic direction and oversee the implementation of the National Retraining Scheme in England, and the “starting of a dialogue” to “develop a common set of principles and measures” to assess job quality and success (following recommendations in the Taylor Report).
This is a welcome, but very limited step, and it remains to be seen how it will pan out in practice. But if the role of trade unions is acknowledged in these areas, why not extend it to the Sector Deals or indeed the proposed ‘local industrial strategies’?
I am also concerned that the paper trumpets “our flexible labour market” and “record employment rates”, but doesn’t take heed of the fact that all too often for working people flexibility is a one way street in favour of the employer and that our labour market is still plagued by insecurity and underemployment.
The creation of an independent Industrial Strategy Council to assess and evaluate the Industrial Strategy is a potentially useful means of accountability and development. However, it will be drawn from “leading business men and women, investors, economists and academics” with no reference to workers or their representatives. Given the White Paper itself states “the real test of a successful strategy is the consequences it has for the lives of our fellow citizens. That must mean more good jobs and better pay”, this is a significant omission.
Greg Clark, Secretary of State, says in his foreword to the Industrial Strategy that “other countries have benefitted from establishing policies and institutions which endure” yet fails to be bold on the sort of social partnership arrangements, such as in Germany, that would really help deliver a sustainable and equitable economy.
“The emphasis on place is welcome, but the agenda must still be freed from the straightjacket of austerity” – Craig Berry, Deputy Director of SPERI
This White Paper offers the kind of policy agenda that should have been devised seven and a half years ago. Nevertheless, we are where we are, Brexit and all, and the May government has perhaps done as good a job as we might have hoped for in terms of identifying the UK’s economic problems and offering something of a plan for addressing them.
The emphasis on place is welcome, particularly the recognition of the value of local economies and the bespoke nature of the support required from the centre. The UK is by far the most geographically unequal economy in Europe, with pronounced differences in economic, social and educational outcomes between and within regions – particularly between London and de-industrialised areas, coastal regions and rural peripheries.
But the White Paper doesn’t go far enough in this regard. The promise to rebalance infrastructure investments across the country will be an important part of addressing these, and it is particularly good to see the commitment to an improved toolkit for assessing infrastructure investments that takes more account of their potential to make substantial improvements to the productivity of regions. The proposed Strength in Places Fund (although seemingly a reannouncement of money already allocated) will be helpful in addressing imbalances in R&D investment across the country.
However, government has stopped short of a commitment to ‘universal basic infrastructure’, a recommendation of the Industrial Strategy Commission, which would provide certainty over infrastructure improvements for all places (and citizens) in the UK. It also suggests little that will challenge the bias in science investment to the ‘golden triangle’, and arguably entrenches this further. Plans to devolve powers and enhance local authority capacity are very thin. The extension of tax reliefs for venture capital in early-stage innovation is also a frustrating mis-step – these schemes don’t do the job they are supposed to do, and primarily benefit London and the South East.
The promise that central government will work with metro-mayors to develop local industrial strategies is also welcome. There is a danger, of course, that smaller places not integrated into large urban economies will be further left behind, despite the White Paper’s warm words in this regard. Allocating half of the new Transforming Cities fund to the six metro-mayoral areas risks disadvantaging, for instance, virtually all of Yorkshire.
As expected, there are very few new spending commitments in the White Paper. BEIS has been among the departments hardest hit by the Whitehall austerity drive, and any Industrial Strategy will underwhelm while this continues. Some of the new public expenditure being trailed is rather microscopic compared to the size of the challenge, and the plan for unlocking private investment is significantly under-cooked. If rebalancing is to become a reality, the agenda must be freed, once and for all, from the straightjacket of austerity.
PHOTO: Flickr/DepartmentforBusinessInnovationandSkills