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Industrial strategies were not a big thing in the UK from the 1980s until the great financial crisis of 2008-09. Since then, these supposedly long-term plans have arrived at infuriatingly short intervals. The UK has had 10 industrial strategies, growth plans or similar since 2011, according to the Labour government’s “Invest 2035” document, published on Monday alongside the investment summit.
All were accompanied by a blizzard of platitudes and declarations of good intentions. In 2017, Teresa May’s government said it was setting out “a long-term vision for how Britain can build on its economic strengths, address its productivity performance, embrace technological change and boost the earning power of people across the UK”. None of those aspirations would be out of place in Keir Starmer’s vision for “a 10-year plan to deliver the certainty and stability businesses need to invest in the high-growth sectors that will drive our growth mission”.
Will this time really be different? Well, there are a couple of features that could be genuine departures, or lessons learned from the past. First, professional services and financial services are in the tent of eight “growth-driving” sectors (the others are more familiar: creative industries, advanced manufacturing, defence, technology, life sciences and clean energy).
Financiers, lawyers and accountants may sound unlikely points of focus for an “industrial” strategy, but their inclusion is a recognition of where the strengths of the UK economy lie. As the Resolution Foundation points out, the UK was the biggest exporter of services in the world after the US. Doubling down looks a better idea than making airy thematic promises about innovation and suchlike, which was Boris Johnson’s style.
Professional services also fall under the banner of “enabling” sectors whose influence spreads through the economy. That also sounds smarter policymaking than earlier something-for-everyone strategies that led to minor interventions in, for example, the tourism or hospitality industries. If the government is saying it needs to prioritise, good. Virtually all post-match analyses of industrial strategies have tended to conclude that there are dangers in government trying to spread itself too thinly, or fiddling in areas that are best left to the market.
Second, there is clear support from the chancellor for taking industrial strategy seriously, which hasn’t always been the case. George Osborne as chancellor never sounded like a fan, for example. And, if the Treasury is not enthused, momentum fizzles out after a few splashy announcements.
Monday’s document was merely a green paper – an appeal for responses before a final version is published next spring. But here’s a snap verdict from Giles Wilkes, senior fellow at the Institute for Government, who advised on industrial strategy for May’s government and the post-2010 coalition administration: “As a think piece, I believe it’s better than anything we produced under Theresa May.”
What’s not to like? Well, in a 50-page document you’d hope that more than half a page would be devoted to describing the powers of a reincarnated Industrial Strategy Council (ISC).
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This time the council will be a statutory body, which should make it harder to abolish than the last one was under Johnson and Rishi Sunak. But “informing and monitoring” the development and delivery of the industrial strategy is too vague. If the body is really to have the status of the Office for Budget Responsibility or the Climate Change Committee, which is supposedly the idea, it has to be seen to deliver hard truths. The other traditional failing has been the tendency of governments to want to mark their own homework on industrial strategy. The ISC must have teeth and be willing to bite.