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East Midlands Chamber News

Industrial strategy must consider geography and sectors

An industrial strategy for the UK must be underpinned by a proper knowledge of the different strengths and assets that exist across the country, East Midlands Chamber* has told the Business, Innovation and Skills Committee.

In a written response to the BIS Industrial Strategy Inquiry, the Chamber stressed a need for any future strategy to be sensitive to both sectoral and geographical needs and should consider strengths in skills-base and physical assets, such as the presence of key ports, power generation and land availability.

The inquiry launch followed the inclusion of the term “industrial strategy” into the Department for Business's name and an indication from Prime Minister Theresa May that her Government will explicitly intervene to support certain parts of the economy.

The Committee will consider what the Government means by industrial strategy and question how interventionist it should be in a free market, such as whether it should prevent foreign takeovers of UK companies.

Priorities for the private sector, in terms of what businesses want from a revamped industrial strategy, the pros and cons of a sectorial approach and possible geographical emphasis, will be explored by the Committee.

It will also look at the industrial strategies of previous Governments and of other countries to see if there are lessons to be learned.

Iain Wright MP, Chair of the Business Innovation and Skills Committee, said at the consultation launch: “I am pleased that the new Prime Minister agrees that a modern innovative and competitive economy needs an industrial strategy.

“But we want to explore what this means in practice. Will this be a return to ‘picking winners’ by the Government? Is it just a rebadging of existing policies? Or is the Government going to make a genuinely new offer to support key industries right across the country?

“We want to explore the rationale for the support and the means of providing it, particularly in a coordinated way across Government departments. We will also want to test how a new Government industrial strategy fits in with its own devolution agenda, so that local, regional and national policies and strategies can be aligned as much as possible."

In its submission, the Chamber said: “We believe there are real opportunities now to shape a great vision for what a successful UK economy outside of the EU will look like. The industrial strategy inquiry provides an opportunity to create a framework for this, demonstrating support for some of the key tenets within that vision.”

It went on to list six key principles to be included in the strategy, including geographical sectoral and trade balance, sustainability through investment and Government support.

Chris Hobson, the Chamber’s Director of Policy, said: “By getting the principles right we can achieve an economy that is sustainable through productivity gains and increased competitiveness with the rest of the world, but underpinning it there has to be the right infrastructure, which includes road, rail, housing and broadband that can both facilitate, and cater for the demands of growth.”

Chris added: “In our reply we have also addressed the issue of Government intervention in business, stating that intervention that creates conditions for businesses to thrive is good while bad intervention would be anything that puts barriers and obstacles in the way of commerce and makes firms less inclined to employ, train or invest.”

The deadline for submission to the inquiry was this morning. The consultation was launched on 1 August.