fbpx
Analysis

Hard Brexit makes mockery of new industrial strategy

by Stewart Fleming | 28.11.2017

Pity poor Business Secretary Greg Clark. He has been sent out to the wicket to play for Britain with a bat which has, to quote Geoffrey Howe’s famous resignation statement from 1990, “already been broken by the team captain.”

The team captain in this case is Theresa May, not Margaret Thatcher. Clark, who launched his shiny, new 255 page Industrial Strategy White Paper yesterday, is being asked by May to champion a policy for a team, her Cabinet, which is not sure whether it even likes the idea of an industrial strategy. It is also a team which is committed to, but divided about, a “hard Brexit” strategy which will make delivering results impossible.

Here the lessons of history are unequivocal.

As Correlli Barnett pointed out in his great industrial history “The Audit of War”, Britain’s global industrial and technological economic leadership was already drawing to a close by the late 1890’s. In 1891, the President of Britain’s Iron and Steel Institute, was warning its members that they faced a challenge from “small armies of highly trained chemists… in constant employment in magnificent manufacturing facilities in Germany”. In Britain, as early as 1890 “no such deployment of science existed” in the steel, electro mechanical and mechanical engineering sectors, Barnett notes.

Pharmaceuticals and aviation apart, in the UK the gap between science and business has never been closed in spite of numerous attempts stretching back decades.

Then Prime Minister Harold Wilson’s attempt at industrial policy, based in part around the creation in 1966 of the Industrial Reorganisation Corporation, failed dismally, dooming his hopes of harnessing, to Labour’s cause, what he dubbed “the white heat of the technological revolution”.

Clark seems to have learned nothing from history, despite his empty rhetoric about making the UK “the world’s most innovative nation by 2030”. Amongst the lessons from past failures and from one of the success stories highlighted by Correlli Barnett, Germany, is that a successful industrial policy needs both a firm long-term commitment from government and close cooperation with the scientific community and business.

Worrying then that business is scared stiff of hard Brexit. This threatens the nation’s supply chain trade links with its biggest market, the EU. It puts at risk the free movement of highly skilled workers. It could choke off the foreign direct investment and technology transfers which, as the success of the foreign owned “British” motor industry shows, has been vital in the sector’s renaissance since the failure of Wilson’s policies in the 1970s.

A government with well-designed strategy would not trigger it as the economy weakens. Brexit-induced inflation, debt-fuelled growth, eroding consumer incomes and confidence, and weakening investment all point in this direction as the OECD, the advanced economies’ official think tank, points out today. The OECD also raises the spectre of rising unemployment as growth weakens to 1% over the next two years, even with a stabilising transition agreement. Good luck, Greg Clark.

Want more InFacts?

Click here to get the newsletter

Your first name (required)

Your last name (required)

Your email (required)

Choose which newsletters you want to subscribe to (required)
Daily InFacts NewsletterWeekly InFacts NewsletterBoth the daily and the weekly Newsletter

By clicking 'Sign up to InFacts' I consent to InFacts's privacy policy and being contacted by InFacts. You can unsubscribe at any time by emailing [email protected]

Edited by Hugo Dixon

3 Responses to “Hard Brexit makes mockery of new industrial strategy”

  • Stewart Fleming is quite right, but omits a crucial dimension of British industrial policy. Long established teams of engineers, scientists and mathematicians must be retained for the sake of national competence and capacity to deliver defence equipment. British defence capability now and in future is put at risk with Brexit. Often, civilian technologies are adapted with special or enhanced performance characteristics for military purposes. So why put at risk the survival of successful teams of technologists, often composed of specialists of various nationalities?

  • Stewart Fleming is quite right, but omits a crucial dimension of British industrial policy. Long established teams of engineers, scientists and mathematicians must be retained for the sake of national competence and capacity to deliver defence equipment. British defence capability now and in future is put at risk with Brexit. Often, civilian technologies are adapted with special or enhanced performance characteristics for military purposes. So why put at risk the survival of successful teams of technologists, often composed of specialists of various nationalities, people who might consider themselves no longer welcome in the United Kingdom?