As with all aspirations, there is of course the small matter of reality to contend with. Don’t forget that this is a party of business that has just said it will substantially raise corporation tax in two years’ time, and while shutting down large chunks of the economy for the best part of a year has provided the patchiest of support and the muddiest of guidance to many of the nation’s small and solo businesses.
It is also the party that in the past week has abandoned plans to create an industrial strategy for the UK, first outlined in a 2017 white paper ‘Industrial Strategy Building a Britain fit for the future’. Instead, support for business and industry will be provided on, as the Financial Times put it, a more “ad-hoc” approach – a move described by The British Chambers of Commerce (BCC) as “a short-sighted step that ministers will come to regret”.
The BCC isn’t the only critic of the government’s industrial strategy U-turn. This week, the opposition business secretary Ed Miliband launched a tirade against the government’s decision. “Tragically, we now have a Secretary of State for Business, Energy and Industrial Strategy [Kwasi Kwarteng] who does not believe in industrial strategy… if I can put it this way, he is half the Secretary of State he once was.” Read his evisceration of the government’s industrial investment plans, and in particular the plans to ‘green’ the economy, and you start to wonder if, counter-intuitively, it is in fact Labour that is the party of business.
Let’s not get too carried away, though – the debate between the pros and cons of the kind of industrial strategy Miliband wants has been raging for decades, and at its heart it is a philosophical one. Past Labour governments, most famously those of Harold Wilson, sought to dictate the country’s industrial direction from the centre – as did former prime minister Theresa May whose plans for industry have now been shelved. Indeed, May’s planned approach to business was viewed as very ‘unconservative’ when set against Thatcherite mantra of the market, but was popular – and even received praise from the opposition this week. Small wonder that it has been ripped up by her successor.
In the end, neither light touch or centrally planned have been particularly successful in solving the nation’s numerous economic problems, including low productivity, an unbalanced focus on London and an overdependence on financial services and housing. Where there has been industrial strategy it has often been characterised by an obsession with ‘picking winners’ and pouring taxpayers cash into their frequent failure. As the Institute for Government puts it “political motivations often contradict commercial imperatives”.
But given the scale of economic disruption caused by Covid, there is arguably more of a case for joined-up industrial thinking than ever before. As I have previously written, the UK is not the only country attempting to build back better and greener – European companies, in particular, have a significant advantage in green industries. But it looks like it will be the only country building back without a gameplan.
