The Disraeli Room

The Disraeli Room

Blog Post

Industrial Strategy: A positive start but more must be done

26th January 2017

The Government revealed their industrial strategy this week, with three main aims:

  • Build on our strengths and extend excellence into the future;
  • Close the gap between the UK’s most productive companies, industries, places and people and the rest; and
  • Make the UK one of the most competitive places in the world to start or grow a business.

What followed were ten pillars of the industrial strategy, which aim to nudge the UK economy in the direction needed to reach these goals. The Green Paper is comprehensive and the Government has done well to select 10 areas which need attention. It is also undoubtedly a positive that the Government is thinking strategically and in the long-term interests of UK plc.

However, to make the industrial strategy a success it needs a Government that is accountable to the results on the ground and on this it is a golden opportunity missed. It needs the right metrics to measure productivity. The UK is, on average, 18% behind other G7 countries. As Chartered Accountants, we know that what gets measured gets done. So first among our recommendations is the adoption of a National Productivity target. It has worked for Singapore, propelling them to the highest income nation in Asia, and alongside other measures it can work for the UK in a post-Brexit environment. A productivity target is one of our three recommendations to Government to help engage businesses in the industrial strategy:

  • National Productivity target: Adopt a national productivity target of 2-3% growth to transform the government’s industrial strategy into a clear plan of action. This will give everyone a clear direction of travel. This should be accompanied by a serious discussion on the nature of the modern economy and how we measure productivity.
  • Supporting SMEs: Government needs to address the growing regulatory burden on small businesses. Costs from Making Tax Digital, increases to business rates, minimum wage rises and the apprenticeships levy all occurring within a short time frame is taking away from a business’s ability to reinvest. By focussing on sector deals there is also a risk that large business dominate discussion and government time and the benefits are not widespread.
  • Exports and trade: Introduce an export voucher to help businesses deal with the costs of exporting. It is encouraging the Government has made exporting one of the ten pillars, but more could be done to incentivise businesses. Recent ICAEW found that only 53% of businesses are exporting, and of those not exporting, 96% have no plans to do so in the future. More ambition might be needed from Government to make a noticeable different in those disappointing figures.

The Government has made a positive start but more needs to be done. It must make itself accountable for the industrial strategy and ensure that the results are widely spread. It needs to engage businesses up and down the country, not just those who shout the loudest or already have the deepest pockets. We look forward to working with Government to achieve those aims.

 


Leave a Reply

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.

COVID-19: Are we truly free or merely enslaved to ourselves?

‘Through discipline comes freedom’. Over two thousand years ago Aristotle warned that freedom means more than just “doing as one likes”. Ancient Greek societies survived...

Airtight on Asbestos – A campaign to save our future

On the 24th of November 1999, the United Kingdom banned the use of asbestos. Twenty years later and this toxic mineral still plagues public health,...

Rationality & Regionality: A more effective way to dealing with climate change | by Hamza King

Liberalism relies heavily on certain assumptions about the human condition, particularly, about our ability to act rationally. John Rawls defines a rational person as one...

The Disraeli Room
What are the Implications of proroguing Parliament?

During his campaign, Boris Johnson made it very clear that when it comes to proroguing Parliament, he is “not going to take anything off the...

ResPublica’s submission to CMA

Download the full text of the submission On 3rd July 2019, the CMA launched a market study into online platforms and the digital advertising market...

The Disraeli Room
Productive Places | WSP and ResPublica

On Wednesday 31st October ResPublica and WSP hosted a panel discussion in Parliament to launch WSP’s Productive Places paper and debate its findings. The report...

ResPublica’s Response to the Autumn Budget 2018

The 2018 Budget delivered by Philip Hammond was the first since 1962 to be delivered on a day other than a Wednesday, and was moved...

ResPublica Response to changes to the National Planning Policy Framework

The Government’s housing announcements on the 5th March were the first substantial change to the planning system since the Coalition reforms six years ago. The...

Food poverty: Time to lift the veil?

A century on from Charles Booth’s famous Poverty Map of London, accurate information on poverty has never been more important. So the findings of...