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Vince Cable's new industrial strategy needs long-term commitment

Vince Cable’s proposal for a UK industrial strategy is a welcome and much needed boost for the UK’s industrial base, but there is much work to be done before its future is secured and business truly feels that there is a long term, mutually beneficial partnership in place with government, says CPA chairman Geoff Cooper.

“Industrial strategy” used to be a dirty phrase in the UK, conjuring up visions of five-year plans, support for ‘lame ducks’ and the command and control industrial policies of the 1970s. Talk to those of us who owned a car built by British Leyland before voting for a return to those policies.

However, many in industry now feel that government can, and should, do more. Support for ‘horizontal’ programmes such as training initiatives and sustaining a reasonable business environment has long been found wanting in a more globally competitive world. 

There is a growing consensus that we have to develop a third way between the extremes of previous decades and create a genuine partnership between government and the private sector.

Whilst the business secretary persuasively argues for intervention and tiered levels of support, dependent upon the needs of individual sectors, any new industrial strategy must break free from the constraints that have dogged previous initiatives.

Politicians understandably want to make their mark and get re-elected, and public officials also understandably want to stay out of trouble and earn their next promotion – I would too, in their shoes. Meanwhile, a lack of focus on outcomes for the country undermines industry’s ability to plan for the long term.

“If we get this right, it should help create a strategy which has the support of all of the industry”

Let me offer an example from the construction sector. The Green Deal is the government’s flagship initiative to refurbish the UK’s ageing housing stock, in which great hopes are being invested. And yet the sustainability and coherence of the policy are brought into question by the frequent refreshing of officials charged with implementing the scheme, a Treasury that is far too good at purse string puppetry and the usual procedures and rules that test endurance. I hope we get a good level of take-up of the Green Deal from householders, but I’m not holding my breath.

The business secretary has rightly given vocational skills high priority in his industrial strategy with the idea of an Employer Ownership Pilot Scheme, which aims to give employers more direct control of how government funding of £250 million on vocational skills is spent.

The construction sector has been at the forefront of round one of the scheme, which is expected to support 11,000 new apprenticeships and, crucially, finance 27,000 vocational courses such as NVQs. This money will be invaluable in forging stronger links between business and the schools, colleges and universities supplying the workforce of tomorrow.

The fly in this particular ointment is the election in 2015.  What happens if the next administration decides to take back control of skills and training and those links, which are being painstakingly built up, are severed?

Currently missing from the debate is how we create a mechanism to ensure that once an industrial strategy is in place, it cannot be swept away by a new government or stalled by all too frequent changes in civil service personnel. Crucial to this will be cross-party support to ensure that industrial strategy remains sacrosanct in a constantly shifting world. 

It now looks likely that the new chief construction adviser will be asked to add an overall sector industrial strategy to his current responsibility for a strategy on spending by government on construction. He will be advised by some sort of council, the composition of which will be identified in the next few months.

If we get this right, it should help create a sector strategy which has the support of all parts of the industry, including professionals, manufacturers, distributors and contractors – and identifies the targets to which we can all sign up, and be measured by.

The window for industry is much bigger than the five years of the electoral cycle. So I would ask one more question of our politicians. “Do you believe that an industrial strategy is any less important than monetary policy?” 

Monetary policy, to mostly universal approval, has been removed from the temporal tampering of politicians. Shouldn’t industrial strategy be afforded the same protection by giving some permanence and independence to the structures we are creating now?

Geoff Cooper is Chairman of the Construction Products Association and Chief Executive of Travis Perkins plc

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