The industrial strategy White Paper, published at the end of last month, shows that Conservatives can think about something other than Brexit. This is commendable. But it has not had a great reception. Chi Onwurah, Shadow Minister for Industrial Strategy, says it’s “too little, too late.” Some business groups are vaguely approving: for the Institute of Directors, the document “identifies the key challenges,” while the British Chambers of Commerce are pleased that Business Secretary Greg Clark has “listened to” firms’ concerns. But the Confederation of British Industry says that the government must focus on delivery.
Indeed. For, while the White Paper paints a rosy picture of a future in which Britain will aim to be “the most innovative country in the world,” there is the little matter of getting there.
White Papers used to be dense, serious analyses of problems with clearly-spelt-out conclusions and proposals for action. Industrial Strategy: Building a Britain fit for the Future looks and reads like a supersized election manifesto. Over 250 pages long, it has little coherent narrative. Much space is taken by irrelevant photographs of people doing things you can’t quite make out, while bullet points, boxes, sidebars abound. Names of improbable groups and organisations pop up without much explanation—the “Midlands Engine,” the “Digital Catapult’s Machine Learning Garage Programme” the “North West Nuclear Arc Programme,” presumably to impress us that stuff is happening.
The government “will set Grand Challenges to put the United Kingdom at the forefront of the industries of the future.” These challenges focus on “Artificial Intelligence and the Data Economy,” “Clean Growth,” “Future of Mobility” and the “Ageing Society.”
In order to explore how these challenges are to be met, the document covers five “foundations of productivity”—ideas, people, infrastructure, the business environment and places.
So far, so schematic. The Grand Challenges have the merit of looking forwards (unlike, say, Labour’s planned renationalisations). Artificial Intelligence and the Data Economy are undoubtedly the future. Of course much of the government “investment” in this area will be wasted, just as much private sector spending turns out wrong, but at least it’s not going to shore up obviously clapped-out businesses, as was 95 per cent of the National Enterprise Board’s spending under Tony Benn and Eric Varley. Mind you, I’m with the Economist in arguing that if the government really wants to do something here, it would do better trying harder to persuade the private sector to spend more on full-fibre broadband than on attempting to outguess the market for future data services.
"The paper paints a rosy picture of Britain's future—but there is the little matter of getting there"On the challenge of “mobility,” I’m unconvinced that High Speed 2, even if branching off to neglected parts of the “Northern Powerhouse,” is worth the money. As for the accelerated switch to electric cars—often driverless ones at that—I see myriad problems which are glossed over in the paper.
Where detail is present, it’s same old, same old. Our technical education is poor, something the Great and Good have been banging on about since the 1890s. This time round, “T-levels” are supposedly the answer to problems which NVQs, GNVQs and vocational A levels couldn’t solve. Despite the Apprenticeship Levy fiasco, we are making a few tweaks there and pushing on. There is yet more money intended to persuade the yoof to fall in love with STEM subjects. Another old chestnut, echoing the Franks Report of 1963, is that UK managers are terminally useless. Let’s spend some more on management education.
OK, I’m jaundiced. But much of this document takes for granted that the private sector’s failures are the root of our alleged productivity problem. Yet government bears much of the blame.
If you want to boost productivity, think properly about the limits of regulation. Last week a boom was reported in City recruitment for regulation and compliance staff. That won’t boost output per head one iota. On the railways, persistent strikes prevent staffing changes which would boost productivity; ministers shrug their shoulders. Absurd regulatory interventions and a new price cap have extinguished competition in energy markets. Planning rules continue to stymie attempts to boost housing output. And—back to Brexit—we seemingly intend to guarantee all existing EU regulations from here to eternity.
I’m just reading Neil Monnery’s fascinating book on John Cowperthwaite’s role in promoting Hong Kong’s meteoric economic development—which involved little regulation and minimal government. It has been called “positive non-interventionism.” After ploughing through this White Paper, it seems a bit of Cowperthwaite’s scepticism is very much in order.
