Feeble upgrade for UK plc
When it comes to the real world of business, the Government’s new Industrial Strategy has more holes than a colander.
The principal criticism is the lack of financial heft. The same Government that is prepared to invest £56bn on hS2, £40bn on extricating Britain from the EU and up to £32bn on Crossrail 2 is proposing to spend a relative pittance on making Britain the most innovative economy in the world.
It is committing an extra £ 2.3bn to Research & Development in 2020-21. Why so little and why the wait for two fiscal years when we need to make the investment now if we are really going to be fit for Brexit?
even when spending is ratcheted up to 2.4pc of total wealth by 2027, it will only then be equal to the OeCD average which with the best intentions isn’t going to turn the UK into a world-beater.
But it is the massaging of the facts which enfeebles the strategy.
There is a declaration that the UK rebuilt its motor industry by ‘deliberately’ attracting investment from overseas.
This is rewriting history. Much of the inward investment by BMW at Mini, for instance, arose out of desperation. In the case of honda at Swindon, far from being encouraged by the British authorities they were cut loose. More recently Business Secretary Greg Clark’s acceptance at face value of the preservation of jobs and investment by Peugeot, after buying Vauxhall, doesn’t look worth the paper it was printed on after 400 jobs were summarily axed at ellesmere Port.
Among the four ‘grand’ challenges outlined in the strategy is to maximise the advantages to UK industry from the global shift to clean growth. The Green Investment Bank (GIB) provided ministers with the ideal vehicle to drive an environmental agenda. Instead it sold the GIB and its key investments to the vampire kangaroo Macquarie for £2.3bn.
This in spite of the Aussie firm’s disastrous record at Thames Water where it shifted fund-raising and income offshore to the Cayman Islands, paid billions in dividends to overseas investors and dumped large amounts of raw sewage into the upper reaches of the Thames not far from Theresa May’s Maidenhead constituency. This does not suggests great environmental awareness in Whitehall.
A grand omission from the document is any reference to foreign takeovers.
Britain will never be a technological leader in anything if it allows our best high tech and software enterprises to fall to the highest bidder. Softbank may have paid a handsome price for Cambridge-based ARM, pioneer of the internet of things, but the UK’s ability to protect patents, intellectual property and people from fleeing overseas is limited.
Softbank’s ownership already has been weakened by selling a quarter of the company to investors in Saudi Arabia who may or may not be under luxury hotel arrest at the Ritz Carlton in Riyadh.
This is hardly safe ownership for one of Britain’s great tech innovators with its brave ambitions, for instance, to deliver the nation’s first ‘smart’ cities.
One suspect the cities will be in Japan or Southern California before they reach huddersfield, Burnley or Cheltenham. Similarly we can have no confidence that the small amounts of cash devoted to driving ultra-fast broadband will make a blind bit of difference. Over the last weekend, parts of Surrey’s suburbs were without broadband and service because Virgin Media was out of action.
Many of our readers will have experienced the frustration of BT’s second rate broadband services.
More reliable and faster internet could have a direct impact on suppressed productivity. The pitiful assistance offered by government, together with rotten service levels by suppliers, are roadblocks to improved output that need urgent removal.
It is good that the May government finally has discovered a vision for a post-Brexit Britain. But the resources, energy and ambition behind it do not cut the mustard.
Selling us short
STUART Chambers is inheritor of the title of ‘the person who sold Britain’ from previous incumbent Sir nigel Rudd.
Among the national treasures Chambers surrendered are glass maker Pilkington, global packaging champion Rexam and most significantly ARM.
now Chambers sits on the Takeover Panel, the enforcer of pledges made by overseas buyers when taking over British companies. Poacher turned gamekeeper or patsy? You pays your money and take your choice.