New Industrial Strategy or Groundhog Day?
01 April 2017 - Rosemary French
The powers to be have been busy with their White Paper on Housing and their Green Paper on an Industrial Strategy.
The powers to be have been busy with their White Paper on Housing and their Green Paper on an Industrial Strategy. While the Housing White Paper is a statement of government policy which will end up in a law, a Green Paper’s purpose is to create debate on policy without actually committing to any specific action. We are asked lots of questions without financial commitments. So, we are asked to respond in somewhat of a vacuum. Still it is awfully nice to be asked yet again, isn’t it?
There are ten ‘pillars’ to this strategy which I shall not list, but for me there are several glaring anomalies in this paper.
Firstly, it is all about ‘closing the gap’. Recognising that London and the South East are the engine of the UK economy delivering a surplus back to Treasury coffers, I would have hoped this meant closing the global gap between UK and German or French productivity for example. But in fact, this paper is talking about closing the gap between the poorest performing and the best performing areas of the UK. So, does that mean London and the South East are to stand still while huge investment is made in the Midlands and the North? If we don’t look after the South, we will lose those amazing businesses which are delivering the GVA which is keeping UK plc afloat. And this is hardly a new message. SEEDA, the South East Regional Development Agency, banged this drum relentlessly in the noughties. Clearly to no effect!
My next issue is Pillar Two, ‘Developing Skills’. The challenges are clearly identified – low numeracy and literacy skills, shortage of skilled technicians below graduate level and a shortage of STEM Skills. This follows 7 years of ever reducing funding to Further Education Colleges, a recent history of failed University Technical Colleges (in the South East certainly) and now they suggest funding new Institutes of Technology. Just a minute do they mean Polytechnics? We have so many financially bankrupt Further Education Colleges in the South East which manage despite all odds to churn out excellent students ready for university, apprenticeships and employability. My response will be to invest in the best performing FE Colleges, we have many, and help them to succeed. Do not reinvent the wheel please. It will just waste valuable time, resource and money!
I am not going to elaborate on Pillar Four, Supporting Businesses to Start and Grow. It is just too painful and reminds me of Groundhog Day after Business Link and the Growth Accelerator programmes.
But the catalyst to any Industrial Strategy is Pillar Three, Infrastructure. All the nine other pillars will fail without investment in transport, water, digital, and flood defence infrastructure. I just get sad when I realise that it is proposed that this investment is used to ‘support rebalancing’ across the country. So, without waiting for our replies, the government has already decided that the infrastructure investment will go outside of the South East to ‘unlock the benefits of agglomeration economies’. Just a minute, isn’t the South East already an agglomeration economy without the massive cities?
My message will be that this government must invest in the South East because it will benefit the north in the long term. Neglect the South East and the whole country will be brought down to the lowest denominator. To quote Don Mclean ‘They would not listen, they did not know how, perhaps they’ll listen now’.
First published in the April edition of South East Business Magazine