The British economy is not performing well. There are huge problems with productivity and we have the slowest rate of growth among developed economies. We have high inflation, high taxation and industrial strife. The government continues to propose that growth should be the national focus but it has yet to deliver anywhere near the sort of growth levels we need to get Britain back on track.
One feature lacking in the ideas coming from the government and the Labour Party is the adoption of an Industrial Strategy to provide the drive and leadership required to increase investment, boost manufacturing and deliver the growth and high-paid jobs we so desperately need. A strategy is more than a document containing ideas, it is a blueprint that companies and investors can look to and understand what the UK is about and how they can maximize their own investments in Britain for the long term.
When Kwasi Kwarteng was Business Secretary he scrapped the UK’s Industrial Strategy. Successive Prime Ministers have not sought to revive it. This is at a crucial time when the UK is facing the very real risk of falling behind on rapidly emerging technologies in green tech, energy, AI and manufacturing, skills and investment. The government must take a lead to ensure that the British economy is the recipient of investment that drives growth.
Centre to any Industrial Strategy must be a plan to increase the share of manufacturing in the British economy and to modernise existing plants and machinery. We should aim to get manufacturing up to 15% of GDP from the 9% where it currently stands. Alongside this must be measures to ensure the UK becomes energy independent so we will never again experience soaring energy prices as a result of the actions of dictators around the world. This means creating the conditions for investment in wind, hydrogen, nuclear and tidal and existing non-renewables.
There needs to be a conscious effort to increase the number of STEM graduates we are producing. This is a crucial area where we are falling behind international competitors. The skills shortage in industry is chronic and unless this is reversed we will not attract the investment needed to expand industry. All the while we need to develop centres for technical education for industry, similar to the German model to produce the skilled workers of the future.
Sectoral needs must also be driven forward. Different sectors require different measures and support from the government. One of the great problems at present is that there does not appear to be any plan from the government as to how we are going to ensure we continue to lead in the fields in which we do, such as aerospace, artificial intelligence systems, and higher education. And how are we going to improve our standing in automobiles, machines and electronics and chemicals? There is no plan for achieving gains in these areas and as a consequence investors don’t know whether to invest in Britain or not.
Great Britain's past success was built on industry and manufacturing prowess. Successive governments have presided over deindustrialization and have made no real attempt to reverse that decline. The consequence is a shrinking share of world trade and many emerging economies set to overtake us within the decade. We need action now to accelerate growth in the UK starting with a new Industrial Strategy.