Today’s Business, Innovation and Skills committee evidence session focused on the Government’s newly announced plans for an industrial strategy. Today, the committee called three prominent figures – all relating to industrial policy from the coalition government of 2010-15 - to give evidence on what industrial policies they implemented, what worked best and what failed.
First to give evidence was the former Secretary of State for Business, Innovation and Skills, Vince Cable. In a wide ranging discussion he looked back at the work of the Liberal Democrat and Conservative coalition and praised some of the policies they implemented such as the development of the Catapult network and the creation of a Green Investment Bank. I followed up on his initial evidence by asking what his top three priorities would be for an industrial strategy. He answered that he believed a long term coherent planning on training, including apprentices and adult learners, needed to be developed. He also said that public procurement must be reformed to support British industry and that research and innovation in the UK must be improved. The UK only spends 1.66% of its GDP on research, an amount which lags far behind other developed nations such as the Germany (2.14%) and Japan (2.77%) so I would certainly agree with him there.
In the second half of the session we heard evidence from Lord Heseltine, former Conservative Minister and author of an influential report on regional policy in the UK, and George Osborne, the former Chancellor of the Exchequer. This fascinating session heard that George Osborne believes the UK has been dragging its heels for too long over the development of new runway capacity and that the UK should not make a binary choice between increasing trade inside and outside of Europe. Lord Heseltine emphasised the importance of trade and productivity for the UK and criticised the appointment of three pro-Brexit ministers, remarking sardonically: “We have three ministers now in charge - a brilliant set of appointments in my view because they can come up with the answers which have escaped me… And if there are all these markets that have escaped the attention of British exporters, it will be marvellous to have it pointed out to them by the new minister responsible.”
Before the session drew to a close I asked Mr Osborne about a contradiction in his evidence. During the session he backed further devolution of taxes to local authorities. Yet, throughout his time in government he blocked the additional meaningful devolution of tax raising powers, including the power to control corporation tax, to Scotland. In his answer, which you can watch using the link above, he implied that he was worried about what he called ‘unusual tax behaviour’ within the UK and said that the Scottish Parliament already has a great deal of power. I pointed out to him that the overwhelming majority of tax revenue raised in Scotland is still controlled in Westminster and that this seems to be a contradiction of his stated policy to encourage devolution. He was, it seems, unable to see the contradiction between his two positions.
This evidence session was a very interesting look back at the policies of the coalition government. Going forward, there is much that needs to be done to produce an industrial strategy that boosts the British economy and improves productivity. I will continue provide updates on the sessions via my website and you can watch today’s full session on the link at the top of the page.