The Prime Minister, Theresa May, has announced a new interventionist industrial strategy in a bid to drive the UK away from an over reliance on a services sector, which currently dominates the UK economy.
The announcement comes after mounting pressure from members of her own cabinet and heads of the British manufacturing industry to make plans for the UK’s struggling manufacturing industry going forward. Indeed, the calls for answers have only grown louder since Mrs May announced that yes, the UK would be leaving the single market in the coming years.
Broadband, transport and energy are highlighted aspects of the plan which bid to “align central government infrastructure investment with local growth priorities”. The ten point plan outlined by the PM involves:
- Investing in science, research and innovation
- Developing skills
- Upgrading infrastructure
- Supporting business to start and grow
- Improving government procurement
- Encouraging trade and inward investment
- Delivering affordable energy and clean growth
- Cultivating world-leading sectors
- Driving growth across the whole country
- Creating the right institutions to bring together sectors and places
Further to this, the government will set out a green paper with the ways that they can help to support businesses by addressing onerous regulatory barriers and agreeing trade deals to make up for the fact that UK manufacturers are soon to lose access to the single market.
Additionally, the government will look to support those who wish to set up establishments which encourage innovation and skills development, alongside boosting STEM skills, digital skills and numeracy whilst investing £170m in new technology institutes.
That fund will be known as the Industrial Strategy Fund and will look to benefit “smart energy, artificial intelligence and 5G mobile broadband”, however, such a small sum wouldn’t affect research and deployment in these areas dramatically.
In total, £4.7bn in additional funding will be provided by the government for R&D, as announced in November of last year. As part of the plan, the government are holding a "consultation on what should be our priorities for a long-term industrial strategy".
The director-general of the CBI, Carolyn Fairbairn said "It must help fix the country's productivity problems and remove the regional inequalities that have dogged our country for generations, having a positive impact on living standards, wages and the future opportunities of many people."
However, she stressed that it will be through skills training, regulation and infrastructure that the government will see the best results, rather than through cash injections. A statement that we, as one of the leading suppliers of welding fittings in the UK, wholeheartedly agree with.
However, Labour’s shadow business secretary, Clive Lewis, questioned how much money the government was investing into the strategy, saying "We await further detail, but what's been announced so far will fall far short of getting us back to where we were in 2010, let alone equip our economy for the challenges of the 21st Century."
Nevertheless, the announced plan isn’t a million miles away from what UK manufacturing has been asking for over the last five years. Whether what comes out at the end of the consultation period is workable is something else entirely, but this is welcome news so early in 2017.