Industry Strategy - Two Cheers

BY Mike Emmerich

The much awaited Industrial Strategy Green Paper has arrived. The Metro Dynamics team have run the rule over it, looking at what’s in it and what it means. Two cheers rather than three is our view. It’s a start and not a bad one at all, but it’s what happens next that matters most.  And that needs local places as much as central government to be bold with their ideas and proposals.

It’s hard to argue that the Green Paper is, in essence, wrong. But it’s equally hard to argue that the Government or indeed places have yet to rise as fully as we need to the challenges facing post-Brexit Britain.  On the one hand this is fair enough, those implications are not yet clear.  But the nation is hungry for a new approach to business and growth. The Government has fed us a little, and yet as we digest the voluminous Green Paper sandwich it has offered, we’re left wondering: where’s the meat? The Green Paper is very necessary indeed. But is it sufficient?

The Government is promising continuity. There are elements of very welcome certainty. The world around us looks like a very different place to the one we knew even just a few years ago. On the other side of the Atlantic, the new administration looks set to rein in free trade in a quite significant way, promising stiff penalties on some movement of capital. There is little sign of that in the Industry Green Paper. On the contrary, it is clearly and deliberately international in tone, even if the means by which we will trade with the EU is changing through our impending exit from the single market. The Green Paper also looks set to continue with an approach where the supply side of the economy is at the centre. Its emphasis is firmly on creating the conditions for business to grow, on ensuring adequate skills, investment, infrastructure and innovation. These are among the ten pillars supporting the new approach. So far so good.

But the Government is also promising change. Its tone is more activist and there is a clearer signalling than ever before on the role of the state in direct stimulus to innovation, skills and a focus on supporting key sectors of the economy. The Government’s role, so long cast as the handmaiden, the servile facilitator, is now more central and its tone, more assertive. The Green Paper is the most explicit recognition in years that Government can intervene to make things happen. If the Green Paper was meant to mark a departure, without a jarring volte face, then in its broad intent, it has succeeded.

But it is a Green Paper, not a White Paper: a signal of the Government’s broad intent not a final and definitive statement of its settled will; the Government is open for responses. The problem is that for a very Green Paper, it is surprisingly loaded with lots of small announcements. Perhaps this is another sign of continuity: Government’s desire to announce small things often rather than to focus on the ideas that will really deliver the change Britain needs in our industrial fortunes. It also has more than its fair share of re-announcements. The danger in this approach, as ever, is that these small initiatives will dominate as we digest and respond to the paper. The better reading is that they are pilots, examples and, like the Green Paper itself, statements of intent. But that may not be what Whitehall thinks. In fact, our view is that Whitehall has done a good job in difficult circumstances.   But there is much yet to be done if what follows is to deliver what urban Britain needs.

As we look to life beyond the Green Paper and its translation into policy, it is vitally important to stay focused on the big issues, not endlessly debate the announcements it contains or get distracted by chasing funding from new or existing pots. We pick out six in particular:

1.  More and better transport and infrastructure. Creating certainty that the big population centres will be linked by fast road and rail. HS2, northern powerhouse rail and the Manchester/Sheffield road are all needed. We need the certainty that they will be delivered along with better intra-city connections and bolder plans for broadband too.

2. We need to build more housing, and support more communities in all the big cities of a kind that people want to live in: in city centres, in suburbs and at city fringes: investing in the schools and amenity to drive quality of life up, making every neighbourhood feel more ‘liveable’.

3. We need major investment in near market research to bring together city business and universities: creating strong local institutions that push the boundaries of the possible in innovation, creating jobs and growth.

4. We need similarly strong local skills institutions: funded and led by employers and the state, driving high quality skills into local labour markets with a focus on the long term.

5. We need to do all the above to create jobs for the people left who got behind in cities but also give them a leg up into those jobs though high quality temporary jobs in the community.

6.  We need to cut out the guesswork where we can. Cities and other places need detailed, granular understanding of the reality of their local economies and industry sectors. A new approach needs to be underpinned by cutting edge economic data, that pinpoints opportunities and threats in local economies and to underpin investment decisions.

To achieve all of this cities need some wriggle room: devolved powers and funds from Government alongside bolder ambition and strong leadership of their own. There are positive signs from the Government. Its ideas for building institutional strength in places chime with our thinking. Places not just Whitehall have roles to play. But the policy proposals so far look timid. If cities, not least those with Mayoral arrangements don’t rise to the challenge and help embolden the Government’s approach, they will probably remain so. In this respect, though not others, there is a lesson we need to heed from the USA. Its time to put some meat in the sandwich.

Further Reading                                  

More detailed analysis of the Green Paper is available below

Details of Mike Emmerich’s forthcoming book Britain’s Cities, Britain’s Future are here []