By Tim Montgomerie
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A number of Tory MPs led by Damian Collins have come together to propose a new industrial strategy for Britain. Mr Collins explains how the approach recommended by him and his colleagues is different from the industrial strategy of the 1970s and also a mythical laissez-faire policy:
"The industrial strategy of the 1970s saw Governments give direct financial aid to failing industries in order to protect jobs. Here people were in effect being paid to build cars that customers didn’t want to buy. That approach was unsustainable and it was in time new ownership, leadership, design, innovation and the commitment of the workforce that ultimately saved businesses like Jaguar and Land Rover from the state run motor industry. 21st century industrial strategy is not just about identifying where direct financial assistance can help accelerate the development of a business or economic region, as we are seeing in the Government’s strategy for enterprise zones and the regional growth fund. This has also been important in the development of new economic clusters, like Tech City, where Government support has acted as a catalyst for private enterprises to bring in much greater levels of investment. In addition to this we have to ensure that our tax and regulatory environment helps UK firms that are competing in a global economy to thrive. This is why, for example, the tax credits announced in the last budget for the production of high end television series, animation and video games were so important. Despite the UK having some of the best practitioners in the world, we were losing business to other countries that could undercut us on price significantly because they offered tax incentives to investors."
The group identifies 17 sectors of special importance:
- Business Services
- Creative Industries
- Digital Economy
- Green Technology
- High Speed Rail
- Life Sciences
- Smart Data
- Space (Philip Lee MP's essay on this topic is a fascinating read)
The group propose thirty policy ideas in total:
- A new runway for the south east of England before 2020
- Commitment to the extension of high speed rail from London to Birmingham, Manchester, Leeds and Scotland
- Local Enterprise Partnerships to support the development of a creative and digital business hub and incubator for every major town and city
- Extend the Research and Development tax credit to include any UK registered intellectual property
- Create a mechanism for green aviation taxes to be re-invested in the development of cleaner and quieter engines
- Promote awareness of the new Seed Enterprise Investment scheme to encourage more non-bank lending to start up businesses
- Increase the number of aerospace engineering places at UK universities
- Appoint a Chief Engineer, on the same level as a Chief Scientific Officer, and task them specifically with raising the profile of engineering inside and outside of Government
- Support the increase in the number of UK suppliers to the European Organisation for Nuclear Research (CERN) where we have only met 25% of entitlements for contracts, whereas France has twice theirs
- Re-introduce sector specific trade missions and receptions through the Foreign Office’s embassies and consulates in developing economic markets
- Explore extending the export guarantee initiative to other sectors outside of the film industry
- Promote awareness of the £10million Start-up loans pilot scheme announced in the budget to support micro-loans, alongside training and mentoring for young people starting a business.
- Government to look at supporting the international secondment of UK business experts to help develop contacts and new markets in emerging economies
- The Export Credits Guarantee Department should do more to target support and build awareness of its services with smaller businesses interested in exporting
- Review the cap on the number of PHD level students from outside of the European Union who can be employed be a single company
- Only allow Ofcom to represent UK domiciled employers and tax payers to the International Telecommunication Union
- Develop plans to support the building of the world’s second only ‘Spaceport’ in the UK and consider UK participation and support for the Material International Space Station Experiment
- Similar to government support for research into the use of grapheme, we should look at investing in synthetic rare earth development, renewable replacements for minerals and reengineering some key industrial processes away from high intensive energy consumption
- Support the development of more offshore wind energy parks
- Consider reducing the amount of capital reserves that banks need to hold against business loans
- Look closely at the process of securing a UK banking license with a view to making it easier for new entrants into the market
- The Government should look to share risk in support for research and innovation. Google owes some of its success to the US National Science Foundation grant that funded the discovery of its foundational algorithm.
- Increase Government procurement from small and medium sized businesses
- Consider simplifying the taxation framework to support more employee ownership of companies
- Complete plans to launch a Digital Copyright exchange to support innovation and protect the rights of content creators
- Work with the NHS to support it becoming more open to adopting innovations in the developments of new drugs and treatments
- Work with industry to help deliver reliable security protocols to protect online payment systems
- Support more data sharing between government and private sector organisations to support innovation in delivering services
- The Government should make the Carbon Reduction Commitment less bureaucratic making it easier for manufacturers to positively engage in the process and reduce their emissions rather than be penalised by the scheme
- The Government should expand the ‘See Inside Manufacturing’ programme and consider making it available to all schools.
Parliamentary contributors to the group include George Freeman, Sam Gyimah, Rebecca Harris, Jo Johnson, Philip Lee, Kwasi Kwarteng, David Mowat and Laura Sandys.
Much more via the group's special 'The Growth Factory' website.