Phew. Thanks goodness that’s over. Parliament is in recess and after a hectic final couple of weeks MPs have probably gone to lie down in a darkened room. There was a last minute flurry of non-Brexit activity i.e. announcements and speeches, consultations and overdue responses. There were five things we were waiting for … here’s what we got.
Industrial strategy asks – recap
Back in April, when it wasn’t 30 degrees and it was probably raining, we said there were five industrial strategy decisions we wanted government to make before the summer.
- Industrial Strategy Council – publication of terms of reference and appointment of Chair
- Sector Deals – greater detail on process (again)
- Local Industrial Strategy – publication of a devolution framework
- Export support strategy – get it published
- SME Productivity Review – undertake a call for evidence
And what we got before the summer
- The Business Productivity Review, which came and went in six weeks – see our views here.
- And a partial pass on local industrial strategy with the publication of the LEP Review.
The LEP review
Maybe a bit of a minority sport, but important nonetheless. The review of Local Enterprise Partnerships – timely, now they are in their seventh year of existence – made some positive proposals for reform on issues such as governance and geography.
- LEPs will shift their focus from growth, to boosting productivity, in line with the industrial strategy
- Businesses will gain greater representation on LEP Boards, with private sector representation moving from 50% to two-thirds on all LEP Boards
- Geographic boundaries will be clarified, with LEPs asked to bring forward proposals to end overlaps and misalignment with Mayoral boundaries
While these changes will be good for local decision making this is not the same as more devolution. Areas still missing out from having clearer leadership of regional economies, through for example Mayors, will continue to miss out, today's announcement therefore amounts to a stop gap on devolution.
What could have shifted things forward – and what we were hoping to see before the summer – is the publication of the long promised framework for devolution, this is what needs to happen next to truly supercharge local economic growth.
The fact that the export strategy is still unpublished is a bit baffling. But more than baffling is the delay on the industrial strategy council. If it weren’t for the recently published construction sector deal one might be forgiven for wondering if sector deals were still a thing. No further guidance on getting one for other industries and clusters, as yet.
In an attempt to try and talk about something other than Brexit, the leader of the opposition was also talking industrial strategy this week – at EEF’s tech centre no less. It was heavy on politics (not surprisingly) and manufacturing. Here’s a 10 point pick n’ mix from me on some of the details.
- The fact that Labour are talking about domestic policy priorities and industrial strategy is a good start (especially if there’s a general election looming).
- But manufacturers might challenge the idea of an industry in demise. A smaller share of the economy in output terms – yes. But still one that has been growing. Industrial strategy is not life support.
- Nor is it a strategy to rely on the value of Sterling for manufacturing growth. As we’ve said (a lot) before the ‘one benefit that Brexit has already brought’ (currency depreciation) is not unanimously seen as a benefit even amongst exporters.
- Labour are right to link procurement and industrial strategy. The UK’s approach to spending over £200 billion buying goods and services from the private sector has long been acknowledged as a weak point (even in the government’s industrial strategy green paper).
- But government should get better at communicating its pipeline of requirements and getting value for money, in the broadest sense, before trying to deliver lots of social objectives with its procurement budget.
- But it was helpful for him to also point out that our membership of the EU is not what makes the UK bad at public procurement.
- Commitment to continue to invest in infrastructure is good – for some it may feel like it doesn’t need spelling out, but that’s not always been the case- hence the potholes and runway shortage.
- Future announcements should give confidence that institutions, such as the National Infrastructure Commission, will live on and continue their good work under Labour – it was their idea after all.
- There were only passing references to ‘industries of the future’. Innovation, including the role of government in supporting it must be at the heart of any industrial strategy.
- Where’s the consistency?While this government still has a lot to get on with – I’m talking mainly about industrial strategy – industrial strategy should not start from scratch after every election. That doesn’t support long term decisions. On policies such as the new grand challenges industry will need to see some consistency of approach from one parliament to the next.
That’s all on industrial strategy for now, we’ll be back making the case for progress on industrial strategy after the summer recess and in the run up to the autumn budget.