George Osborne gave Philip Hammond what is known in sport as a hospital pass: an economic plan based on the UK returning to pre-2008 productivity growth of two per cent per annum without the investment or strategy to make it happen. The Office of Budget Responsibility’s figures show we actually got paltry productivity growth of 0.2 per cent growth in 2016 and the forecast for 2017 is 0.0 per cent. Read more
In 2014, Dunlop Systems and Components relocated from a leaky old factory in Holbrook to a highly efficient new factory in 2014. At the same time the company fundamentally redesigned the high pressure steam processes used in making its air suspension components, saving the business 67 per cent on energy and 38 per cent on water use. This strategic approach to resource efficiency turned around a failing company to become a thriving domestic and export business providing high quality jobs in Coventry.
Not all of the ten ‘pillars’ of the industrial strategy green paper will make it into the white paper expected by the end of this year. Civil servants working on the final strategy say the innovation, skills, place, business and infrastructure pillars are the ones likely to remain and the content of the affordable energy and clean growth pillar will be embedded across the strategy. If that can be done well it will better than having a standalone chapter, but if it is done badly, it will be a disaster for the UK’s low carbon transition.
This post first appeared on BusinessGreen.
The government’s Industrial Strategy consultation closed on Easter Monday. But before we had chance to draw breath, a snap election was called, moving the political agenda on again. Read more
Theresa May recently launched the centrepiece of her domestic agenda: the UK’s industrial strategy. After six months of commentary on the parallels between the phenomena that led to the Brexit vote and US election result, it is useful to reflect on the differences that are starting to emerge. A quick read of the green paper appears to show that May is charting a very different course on industrial strategy from the one now being advocated on the other side of the Atlantic. Significant differences are the approach to resource productivity and the attitude to growing low carbon markets. Read more
It’s heretical for a think tank to admit this, but our latest big idea is not really that big. It is in fact medium sized and achievable step from where we are now. It’s an idea so obvious, that once you hear it, you’ll be surprised it’s not happening already. But it isn’t, we checked. Rather than coming up with another big idea for nature, Green Alliance, in partnership with the National Trust, has researched how to enable existing big ideas, around ecosystem services and natural capital, to translate into real changes on the ground. The result is the Natural Infrastructure Scheme (NIS), a new market mechanism which would mean farmers and other land managers could financially benefit from environmental improvements such as flood alleviation and habitat creation. We think its simplicity could lead to ‘payments for ecosystem services’ becoming a mainstream market, reversing declines in nature, and supporting new, environmentally beneficial approaches to farming in the UK.
Industrial strategy is back. It featured in Theresa May’s Birmingham leadership speech as one of the economic reforms necessary “to get the whole economy firing”. As prime minister, May has followed through by elevating the former Department for Business Innovation and Skills’ competitiveness remit ‘to develop a long term industrial strategy’ to the title of the new Department of Business, Energy and Industrial Strategy (BEIS). Read more
The government is in asset sale mode. The planned sale of the nationalised banks will set a new high watermark for capital raised, previously set by the BP privatisation, presided over by Margaret Thatcher in 1987.
The sale of the Green Investment Bank (GIB) is being pushed through, alongside the sale of Lloyds and RBS. But, the criteria by which these sales will be judged are quite different. The sale of the retail banks needs to maximise returns to the taxpayer through the share price achieved on the day of the sale. But, the sale of GIB shares needs to optimise return to taxpayers in the long term by securing the bank’s unique mission. Read more
As public expenditure has been reduced the chancellor has looked to the private sector to make up the shortfall. So far, this strategy has worked: 2010-14 saw cumulative growth in GDP of seven per cent, helped considerably by £40 billion growth in the private sector investment component of GDP over the same period, a rise of 16 per cent. This level of business investment was one of the strongest sources of growth the last parliament. Read more