Industrial strategy needs to unite the country, not divide it further

Chi Onwurah MP on what the government's industrial strategy gets wrong. 

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This weekend I was at the Durham Miners' Gala, where hundreds of thousands of people gathered to celebrate miners, trade unionism, and the working-class culture of the North East.

The unity, solidarity and sense of tradition I felt was a far cry from the divisions that have characterised politics in the last few years.

Since the rise of George Osborne’s zombie economics  in 2010, unnecessary and damaging austerity has hit jobs and living standards across the country – but the effect has been far greater in constituencies such as mine than in the well-heeled areas represented by many Tory MPs.

Ours is now the most unequal economy in Western Europe, with median earnings in inner London a whole third higher than those in Tyne and Wear.

Industrial strategy can heal these divisions. It is about building the economy we want, choosing our own national future rather than leaving it to the caprices of the market. Investing to create jobs and growth not just where it will be immediately profitable but in a way that benefits us all.

But as today’s report from Sheffield Hallam University shows, this government’s industrial strategy is going to widen the divisions in our country, not bridge them.

Researchers found that industrial strategy's narrow sectoral focus targets only 10 per cent of our manufacturing base and only 1 per cent of the whole economy.

In addition, this government’s focus on research and development in only a few sectors will largely benefit facilities in affluent parts of southern England. Britain’s older industrial areas – the places most in need of a successful industrial strategy – have very few of the R&D facilities that are likely to be first in line for funding.

To take one example, the Cambridge area – population 285,000 – has almost as many R&D jobs as as the whole of the north of England – population 15.2 million – and more than Scotland and Wales combined. That’s before you count any of the R&D jobs associated with Cambridge University.

In light of this research, the government’s industrial strategy looks less like a plan to unite our country than a “bung” for certain parts of it – something this government certainly has form for.

This is more evidence that the current government is more interested in ad hoc support for favoured industries and companies, as I’ve written before. Independent bodies have echoed these criticisms, with the Business, Energy and Industrial Strategy select committee and the Industrial Strategy Commission slating the plan for its lack of vision and narrow scope.

In recent days we’ve seen Greg Clark developing industrial strategy through the pages of the Financial Times, making claims at odds with previous government policy and giving no clue as to what conversations have been had with private companies and sector lobbyists behind closed doors.

This is an approach to industrial strategy that centres on backroom deals with specific industries and businesses – leaving the vast majority of British workers out in the cold.

Labour’s industrial strategy will rebuild and transform the economy in every region of the UK.

Backed up by our £250bn National Transformation Fund, the National Investment Bank and a network of Regional Development Banks, our industrial strategy will spread wealth across the country – not just concentrate it in pockets of affluence.

It will be wide-ranging, setting out national missions to address the societal issues of our time, from climate change to job automation. These are challenges that are experienced in every part of our country – and they can only be tackled nationally.

A Labour government would engage with sectors – setting up sector councils modelled on successful examples such as the Automotive Council – but unlike the Tories this won’t be limited to a favoured set.

We’ve signalled our commitment to creating prosperity across the entire country with our pledge to found a new Catapult Centre for retail – the UK’s largest private employment sector and one wholly neglected by the government’s strategy. Every part of the country has jobs in the retail sector, and boosting the take-up of innovation will be necessary to create higher-wage jobs and raise productivity.           

The economic model created by Margaret Thatcher in the 1980s has seen London and parts of the south of England vastly outstrip the rest of the country in terms of wealth production. But this hasn’t always been the case – for a long time, our country’s economy was driven by pockets of enterprise and industry across the country.

These places can be our engines of prosperity again. There is a latent culture of building, creating and innovating in this country – the same culture that we celebrated this weekend at the Durham Miners' Gala. With the right balance of government support and private sector investment, this culture can be nurtured and its potential unlocked.

Unfortunately, it seems the Tories are blind to the potential of our regions and nations. This report should be a wake-up call: the government needs to scrap its narrow and unambitious industrial strategy, and adopt Labour’s approach to genuinely transform the economy for the many, not the few.

Chi Onwurah is the Labour MP for Newcastle upon Tyne Central, and the shadow minister for industrial strategy.