Author: Jim Pickard
Posted on: Financial Times| November 27th, 2017

 

The UK government on Monday unveiled a long-awaited industrial strategy aimed at tackling Britain’s productivity woes and championing sectors including automotive, construction and the life sciences.

The 255-page white paper is designed to prove that the government has the vision to enhance Britain’s industrial competitiveness after the UK’s fiscal watchdog last week cut economic growth forecasts and highlighted longstanding productivity problems.

But Prime Minister Theresa May’s hopes of regaining the political initiative with the document were undermined after Conservative party grandee Michael Heseltine suggested that a better way to improve growth would be to stop Brexit.

Greg Clark, the business secretary and minister responsible for the white paper, admitted that British industry needed to “raise our game” as the UK leaves the EU by addressing weaknesses in the economy.

“For all the excellence of our world-beating companies, the high calibre of our workforce and the prosperity of many areas, we have businesses, people and places whose level of productivity is well below what can be achieved,” he wrote.

The white paper is a mix of new policy ideas and existing initiatives in numerous areas.

It includes new “sector deals” in artificial intelligence, automotive, construction and life sciences, where the government will collaborate alongside the private sector.

Lord Heseltine, a Europhile Tory who is a longstanding advocate of a state-run industrial policy, said the UK was “facing years of stagnation” because of the uncertainty surrounding Britain’s departure from the EU.

“Whether they’re British companies or overseas companies investing here, they’re hesitating . . . so long as we have this Brexit shadow going over us, that will remain,” he added.

Carolyn Fairbairn, director-general of the CBI employers’ organisation, called on ministers to “move fast from strategy to action”.

One area of tension around the industrial strategy is the government’s pledge to cut net migration once the UK is out of the EU and is no longer subject to the bloc’s “freedom of movement” rules.

The white paper insists that Britain will remain an attractive destination for “the world’s most talented and innovative people” due to its thriving and flexible labour market.

More broadly, the paper says the UK needs to embrace more trade with the world after leaving the EU. “There are opportunities to be gained upon leaving the EU,” it adds. “The opportunity to become more protectionist is not one of them.”

The paper stresses Mrs May’s target of increasing research and development investment from 1.7 per cent of gross domestic product to 2.4 per cent by 2027.

It urges the setting up of a world-class “technical education system” with an additional £406m spent on maths, digital and technical education.

It also suggests that £725m should be invested in a new industrial strategy challenge fund.

Some of that money could in theory be found from the national productivity investment fund, an over-arching pool of money created by chancellor Philip Hammond a year ago and expanded in the Budget to £31bn.

Many of the main points in the industrial strategy have already been announced by the government.

For example, £400m of support for new electric vehicle charging points and extra money for “digital infrastructure” have already been publicised.

There will be a new, independent industrial strategy council to assess the government’s progress in important areas.

Ms Fairbairn said that nine in 10 companies saw a modern industrial strategy as vital in the face of Brexit uncertainty and the sombre economic outlook.

“This announcement shows the government has its eye firmly on the horizon, not just the next few yards,” she added.

“The hard work starts now. Today’s announcement must be the beginning of a strategic race, not a tactical sprint. And it needs to last. This is a time for consistency and determination, not perpetual change with the political winds.”

Mr Clark, asked about falling investment in the British car industry, said that executives believed it was still an “exciting” time to invest in the UK.

The figures showed falling investment only because the data were “very lumpy”, he told the BBC.

The government said it would publish a “future of urban mobility” strategy within the next year.

It is also planning to publish within months a strategy on how the state could help shift transport towards a “zero-emission” future.

MSD clarifies job numbers at new UK research hub
The company behind a large investment in the UK’s life sciences industry has been forced to clarify the number of new jobs it will create, writes Sarah Neville in London.

MSD, the name by which US-based Merck is known in the UK, announced on Monday that it would establish a new research hub in the London area, to open around 2020.

The company would invest around £1bn in the new venture, according to two people briefed on the negotiations.

An initial statement from MSD on Sunday said the new discovery centre was “anticipated to create 150 new research roles with the aim of attracting the brightest and best research scientists to work in London”.

The statement continued: “It is also envisaged that the new site will accommodate approximately 800 additional staff for the UK domestic market and other European clinical functions currently based in MSD in the UK’s Hoddesdon headquarters.”

On Monday, however, MSD issued what it described as a “clarification”, making clear that the 800 staff already work for the company but will be moving from Hoddesdon to the new London base.

 

Read at: https://www.ft.com/content/b5af466e-d360-11e7-a303-9060cb1e5f44