Make UK has proposed that a Royal Commission on industrial strategy (IS) be established. The aim would be “to determine a cross-party consensus on future priorities and ambitions for the manufacturing sector and wider economy and society, and then to agree aims and objectives that the state regard as strategically important markers of success.
The Royal Commission should determine the UK’s offensive and defensive priorities for future trade deals. These would then be used to inform wider industrial strategy planning.
The IS would have growth targets and timeframes. It would set out “whether to prioritise horizontal or vertical approaches to industrial development” and set out responsibilities of the public and private sector.
The recommendation is one of four made in a wide-ranging, 50-page report, Industrial Strategy: Manufacturing Ambition. The three other recommendations are:
- Re-established the Industrial Strategy Council (ISC), this time on a statutory basis to make it harder to abolish. [Kwasi Kwarteng scrapped it two years ago, when he was business secretary.]
- Cabinet Office should be responsible for ensuring cross-government co-ordination and implementation of industrial strategy. The ISC would monitor policy implementation and advise the Cabinet Office.
- As party of the Royal Commission, “stakeholders should negotiate and agree institutional reforms to ensure the stability of policy delivery and outcomes”.
A Royal Commission is a committee of inquiry whose members are appointed by the monarch on the advice of the government, increasing its status. There have been none in the UK since Tony Blair set up an inquiry into the reform of the House of Lords in 1999. However, they may make a comeback. The Conservative Manifesto in 2019 promised a Royal Commission into the criminal justice process; none has been established, however.
Reaction to the specific proposal of a Royal Commission has been mixed. There is undoubtedly a desire among companies for a longer-term, more consistent and more effective approach to industrial strategy and to manufacturing.
The abandoning of an industrial strategy in the UK has been strongly criticised over the past four years. Andy Haldane, formerly chief economist at the Bank of England and now ceo at the Royal Society of Arts and a member of the government’s economic advisory council, said at the launch of the Make UK report that there is an arms race in re-industrialisation – plus remilitarising, “the wrong kind of arms race”. There is much evidence to support Haldane’s point about re-industrialisation.
Writing in the Financial Times on May 12th, French president Emmanuel Macron says: “We are committed to building back French industry and fostering our economic power.” He says that international chief executives will gather in Versailles shortly for a “Choose France” event, many of them to unveil strategic investments. Hundreds of factories have been set up since the first of these events, in 2018.
“This battle for re-industrialisation must obviously be fought on a European scale,” Macron says.
In the UK, the government has commissioned a review of the UK’s efforts to attract positive foreign direct investment (FDI) from Lord Harrington, a former minister at the business department. EAMA has offered Harrington its support for the review and would welcome feedback.
Harrington was well-regarded as a minister and his appointment completes his rehabilitation with the government. He was one of a tranche of ministers and former ministers to lose the Conservative over Brexit in 2019, including Philip Hammond, Ken Clarke and Greg Clark and David Gauke.