Britain is tearing up its existing policies as its rivals steam ahead
Today, Rishi Sunak is in Tokyo where he’s just announced £18 billion of Japanese investment in the UK economy. But there’s a fly in his miso soup.
With exquisite timing, three former business ministers (Labour’s Lord Mandelson, the Lib Dems’ Sir Vince Cable and the Conservatives’ Greg Clark) have got together in a Financial Times article to attack Sunak’s industrial strategy — the main plank of which is not to have an industrial strategy.
When he was Chancellor in 2021, Sunak scrapped the strategy drawn up by Clark just four years earlier. According to the FT, the move came as a shock to many people working in Boris Johnson’s government, and the report quotes an official who claimed, “The Treasury blindsided us.”
His Majesty’s Treasury is notorious for its attitude to other Whitehall departments — and especially the Business department, its closest rival. However, this destructive act can’t solely be blamed on civil service turf wars. As PM, Sunak went to the trouble of creating a string of new departments so he could dismember the Department of Business, Energy and Industrial Strategy (and thus consign those last two words to the scrapheap).
The erasure of industrial policy appears to be a very personal mission for the Prime Minister. Perhaps he thinks it is superfluous — after all, its absence didn’t stop him from securing billions in Japanese investment. But on closer examination, most of this cash is being invested in the clean tech sector, where the Government does have an industrial strategy (even if doesn’t refer to it as such). Energy and climate policies set long-term objectives so that businesses can commit billions to multi-year projects without being undermined by short-term political flakiness.
This is what grown-up countries do; and so if it works for the energy sector — which, judging by the Japan deal, it does — then why not take the same strategic approach to other industries?
There is, for instance, a lot of concern about the future of the UK’s automotive sector — where car production is sharply down. Less judicious corners of the Left blame this on Brexit, while their equivalents on the Right blame Net Zero. The real threat is from China, whose electric car exports are surging (despite the country’s carbon targets and non-membership of the EU). But, of course, the Chinese have an aggressive industrial policy, which is why they’re eating our lunch while our leaders bleat about non-interference in the market.
The truth is that industrial policies can fail — but then so can policies in all sorts of other areas and no one is saying that we shouldn’t have an education policy, a health policy or a defence policy. Yet, for some reason, our Prime Minister has singled out British industry for neglect.
If the Conservatives crash to defeat at the next election, then much of the blame will attach to the incompetence of Boris Johnson and Liz Truss. But the absence of a strategy for securing our long-term prosperity? That’s on you, Rishi.