Alan Mak is Co-Chairman of the Conservative Party’s Policy Board, a Vice-Chairman of the Party, and is MP for Havant.
As our world-leading Covid-19 vaccination programme continues apace, its success should be the blueprint for a new post-pandemic Industrial Strategy.
From the rapid development of the Oxford/Astra Zeneca vaccine followed by production at a British manufacturing facility to the swift procurement of other vaccines to provide supply resilience and the tight focus on key priorities (such as whittling down over 120 vaccine candidates to the most promising seven), we have many positive lessons to learn from this remarkable success story.
In the most demanding circumstances, we saw government, academia and industry working effectively together. The key principles that delivered such great results will help us shape a new Industrial Strategy that will leverage new technologies to deliver millions of new jobs, rising wages, and economic renewal.
Perhaps a different description to the 1970s-sounding “Industrial Strategy” will be needed to signal a new approach. But whatever it’s eventually called, this new plan will be key to enabling Conservatives in government to meet the Prime Minister’s pledge to “Build Back Better” after Coronavirus.
Five objectives should underpin this new post-pandemic strategy for growth:
1. Level Up skills and infrastructure in our regions
Levelling up skills and infrastructure so more people have the training, skills and transport to access high-wage jobs must be at the heart of the new plan.
Our new £95 million Lifetime Skills Guarantee is the first step. From April, it will offer adults without an A-Level or equivalent qualification free college courses, providing them with skills valued by employers. New jobs that work with advanced technologies like robotics (such as those made at Tharsus in Blyth, which pack Ocado’s shopping bags) or clean energy (for example at Teesside’s new Hydrogen Transport Centre) will require higher level skills.
Higher-wage jobs created by the new Industrial Strategy will only be meaningful if people can get to them, so the levelling up of regional transport infrastructure is also key. Local economies are more productive when people can get to work efficiently, especially using public transport. That a 27-mile train journey from Liverpool to Chester takes 46 minutes whilst passengers travelling from London Paddington to Reading cover double the distance in half the time illustrates the disparities that must be addressed.
2. Take advantage of our regulatory freedoms after Brexit
Our 2019 manifesto recognised that EU regulations were a “barrier to innovation”. Having now delivered Brexit, the new Industrial Strategy should fully take advantage of our new-found freedoms.
Recently-announced proposals for a new UK-wide system for providing financial support to businesses is a welcome step. As the long-term replacement for the EU’s prescriptive state aid regime, it will allow us to be more dynamic in providing business support, including in innovative, R&D-focused industries.
The new Regulatory Horizons Council will also identify the implications of technological innovation, and provide government with expert advice on the regulatory reform required to support its rapid and safe introduction.
In addition, we should establish a new legally-binding British Innovation Principle to provide a pro-innovation counter-balance to the EU’s overly risk-averse Precautionary Principle which still colours much of our approach.
The Precautionary Principle can unreasonably burden innovators with having to prove the absence of danger regarding a particular product, service, or procedure. It does not require regulators to weigh potential risks against the potential benefits that society might enjoy from technological development, and often constrains R&D. A British Innovation Principle would change that.
3. Support the UK’s transition to Net Zero
The UK was the first major economy to have a legally-binding commitment to Net Zero greenhouse gas emissions by 2050. Having kick-started the first Industrial Revolution and its derivative emissions, our new Industrial Strategy must invest in the technologies that allow us to reach Net Zero. Hosting the COP26 Summit this year will also focus the world’s attention on Britain’s actions.
The Prime Minister has already announced £350 million of funding to cut emissions in heavy industry, including £139 million to support the transition from natural gas to clean hydrogen power, and scaling up carbon capture and storage (CCS) technology which can stop most emissions being released from industrial plants.
£10 million has also been allocated for further R&D for more efficient electric car motors and more powerful batteries – two areas where Britain can become a world leader. In welcome news, Britishvolt has selected Northumberland for the UK’s first battery Gigafactory, investing £2.6 billion and creating 3,000 jobs. This is the largest industrial investment in the North East since Nissan’s arrival in 1984.
The Government’s “Jet Zero” initiative to decarbonise the aviation sector is another example of the type of partnership that should feature prominently in the new Industrial Strategy.
4. Focus on key innovative sectors and the Fourth Industrial Revolution
It would be tempting for the new Industrial Strategy to spread itself thinly, covering a wide range of sectors. This would be the wrong approach.
Instead, it should focus investment and political backing on the Fourth Industrial Revolution’s technologies. These are the most impactful and transformative technologies, likely to create whole new industries (and millions of jobs), apply across a wide range of economic sectors, and where the UK can develop a strong competitive advantage. These key technologies include:
5. Strengthen domestic manufacturing capacity and resilience
The global scramble for PPE at the start of the pandemic showed how relying on international supply chains can leave countries vulnerable. Equally, the manufacture of a key vaccine in Britain as the pandemic comes to an end shows how economically and strategically beneficial self-sufficiency is.
Strengthening our domestic manufacturing base, especially for key products crucial to national security and safety, must be a core component of a post-pandemic Industrial Strategy. Re-shoring production will help to increase supply chain resilience and create thousands of new jobs in Britain.
Through “Project Defend”, the Government is already identifying key economic goods and products, and last week, a new partnership was signed with vaccine manufacturer CureVac to rapidly develop new vaccines in response to new Covid-19 variants if needed, and to manufacture them in the UK. The CureVac deal bolsters onshore manufacturing capacity and is exactly the sort of agreement that should be encouraged in other sectors by the new Industrial Strategy.
We should also create a critical minerals reserve stockpile with our Five Eyes intelligence partners. This would end our collective supply vulnerability in relation to minerals such as lithium, cobalt and tungsten.
Getting our new Industrial Strategy right is key to our goal of “Build Back Better” and vital for our prospects at the next general election.