Labour says government’s Industrial Strategy is “too little, too late”


Opposition party Labour has said that coming up with an Industrial Strategy seven years after being in government is not enough.

This week the government finally launched its much anticipated Industrial Strategy, which aims to fix the UK’s faltering productivity and offer solutions for how we can succeed as an innovative nation, on a global stage, after we exit the European Union.

Prime Minister Theresa May said that the Industrial Strategy “will shape a stronger and fairer economy for decades to come”.

However, opposition party, Labour, has hit out at the strategy, claiming that it is not good enough, considering that the Conservative government has been in power for seven years now and is only just coming up with solutions to fix the country’s productivity problem.

Last week the Office for Budget Responsibility halved its forecast of the UK’s long-term productivity trend to 1%.

Chi Onwurah, shadow minister for industrial strategy, science and innovation, told diginomica:

The Government’s industrial strategy – launched yesterday – comes 16 months into Theresa May’s premiership and seven long years after this Conservative Government first took office.

That’s seven years in which productivity has stagnated – despite the technology revolution all around us – and wages have fallen, with real pay lower than it was in 2010.

Why, then, is it only now that the Government is laying out what it calls the ‘first strategic actions of a long-term approach to transform our levels of productivity’?

The truth is that today’s white paper is too little, too late. It contains few new ideas and even fewer substantial interventions, promising instead to set up a plethora of ‘reviews’, ‘commissions’ and ‘committees’.

Onwurah, whom is also MP for Newcastle Central, added that the priority should be people and infrastructure, not just technology for technology’s sake. She said:

It focuses on technology as the ‘answer’ but my twenty three years in tech as an Engineer taught me that whatever the problem, technology is never the answer – on its own. We need investment  in people and skills, infrastructure and business support, as well as long term R&D investment, not one-off, ad-hoc funding for fashionable areas.

The Government claims in the white paper that ‘we are ready to be judged on our performance’. If they are looking to rehabilitate the economic performance of the last few years, they will have to do better than this.

Business responds

The Industrial Strategy has many facets to it – including partnering with different sectors to help drive growth in areas the government deems to be important (AI, life sciences), whilst it also aims to invest in people, ideas and infrastructure. You can read the full report here.

And business has been quick to respond with its thoughts on the approach. Antony Walker, deputy CEO for technology membership and lobby group, techUK, welcomed the focus on AI, but said that more needs to be done to help small businesses. He said:

This is an industrial strategy with digital technology at its very core.  The Government is right to stress that the success of every industrial sector and every business in the UK will depend upon their approach to digital innovation.  Digital tech is the golden thread that runs throughout the White Paper including every sector deal.

techUK strongly welcomes the new sector deal for AI.  The UK is an acknowledged world leader in AI but needs to work hard to stay at the forefront of a technology that will shape the future for everyone. The commitment to opening up UK data to make us the best understood economy in the world is truly transformational, as is the Ministerial Review of Govtech that can help transform our public services including health and social care.

There is still plenty to do, including supporting those millions of small businesses not yet taking advantage of basic tech. Companies can’t take advantage of AI until they have built their basic digital foundations – we would like to see a digital readiness index to measure progress in building these foundations. However, this White Paper shows a clear commitment from Government to prepare for and embrace the future.  Given the challenges that lie ahead for the UK economy post-Brexit,  there is a clear need to commit to the long-term. This White Paper is a great start.

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), agreed and said that more needs to be done to boost small business’ productivity. He said:

We agree with the ambition to set clear ‘grand challenges’ for the UK economy and will be working with Government to ensure small businesses play their part in initiatives such as the Industrial Strategy Challenge Fund and the Small Business Research Initiative.

However, this is only the first piece of the productivity jigsaw. To have a sustained and game-changing impact on the economy, the focus needs to be on how to improve productivity across the UK’s 5.5m small businesses and the self-employed. We are keen to take part in the announced review into improving the productivity and growth of small and medium-sized firms.

We welcome the recognition of the importance of supporting the spread and diffusion of innovation. But a lot more needs to be done to increase productivity by encouraging firms to adopt new to firm innovation into the heart of their businesses, as well as a fresh look at how regulation can support small business innovation of all types. These are the types of issues we want to see the SME review address.

Meanwhile, fast-growing SME, UKCloud, which has a history of championing UK tech and has found success off the back of government initiatives, said that the Strategy’s focus on AI was important, but warned that Brexit could be a distraction. Chief executive, Simon Hansford, said:

The industrial strategy is wide ranging and ambitious, brigading many new initiatives with old. Given the recent forecasts from the OBR, the strategy needs to be viable and stable, but at the same time capable of accommodating the unknown outcomes and consequences of the Brexit negotiations.

It’s encouraging to see the strong emphasis on technology, data, intelligent procurement and supply chains. In particular, the Industrial Strategy rightly presumes that government procurement decisions are one of the most significant interventions in the UK economy, and rightly wants to keep the UK at the forefront of the AI and data revolution.

I was particularly encouraged to see that a Government Office for AI will be created, and that businesses, institutions and Government will be encouraged to invest in technologies and set standards to enable secure and trusted use of data. I hope that the day to day distractions of Brexit do not deflect government from achieving the broad strategic outcomes that this strategy is setting for us all.

And the issue of Brexit was even being raised by members of the governing Conservative Party. MP for Broxtowe, Anna Soubry, tweeted:

My take

At the moment, the Industrial Strategy is just a whitepaper filled with lots of ambitions and promises. The government needs to deliver on those within the context of a very difficult economic period – fuelled by Brexit. Time will tell.

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Disclosure - UKCloud is a diginomica/government premier partner at time of writing.

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