The UK government unveiled its long-anticipated industrial strategy on November 27th, 2017. The 255 page white paper was praised for addressing the economic woes that has been haunting Britain through the years. There have been calls, however, to focus more on implementation than mere strategy.
The white paper comes on the backdrop of the UK’s fiscal watchdog’s grim forecast of the productive future of the nation. The Office for Budget Responsibility cut down its growth forecast figures for the economy by 0.5% to reduce growth rate to 1.5% from the initially predicted 2% in March of 2017. The adjusted report further showed that growth will further slow down to 1.4% in 2018 and then reduce pace to a sluggish 1.3% in the following year. This would carry the UK economy back to its weak state during the era of the deep financial crisis in 2009.
The 255-page document aims to tackle productivity problems, enhance industrial competitiveness, and boost local manufacturing over the coming years in a move to buck the trend. It is a blend of existing initiatives and new policy ideas in a lot of areas.
Britain has been behind competitor developed nations such as the US and France in the productivity sector and the strategy has spared no proposal in a holistic bid to close the gap. The country’s productivity rate is today dangling some 20% below the trend of the pre-financial era.
Investment has seen a sharp decline since Brexit was confirmed in 2016 and heavy goods manufacturers across the country have had reservations about experiencing reduced industrial activity and stalling procurement of production materials due to the uncertainty behind negotiations with the EU. This is particularly important in the flow control field as the oil industry in Aberdeen still presents a massive opportunity for pump manufacturers.
According to the chief executive of the EEF (the trade body for over 20,000 UK manufacturers), Terry Scuoler, the industrial strategy has captured what needs to be done “pretty starkly” and that some further detail touching delivery “would be welcome”.
The strategy text strongly insists that the UK’s flexible and thriving labour market still makes the country an appealing destination for the “world’s most talented and innovative people” despite the shadow of Brexit hanging over the nation.
The paper highlights the prime minister’s target to increase development and research investment to 2.4% of gross domestic product by 2027 from the current 1.7%. It advocates the erection of a “world-class” technical education system spending an additional £406 million on digital, maths, and technical education. It also goes on to suggest that a new industrial challenge fund investment of £725 million be introduced.
The strategy has received its fair share of backlashes from political figureheads to industrial players and experts despite winning praise for analysing the country’s issues in their entirety.
Seeing that the UK currently enjoys a healthy supply of labour from the free movement relationship with the EU, some commentators, and party members still believe stopping Brexit is a better way to improve growth.
Another criticism of the strategy is the paper’s failure to directly address issues in the supply chain and the productivity challenges of small and medium-sized enterprises.
But the general consensus still points to making the strategy sustainable by drawing up direct and clear implementation plans.