Industrial Strategy — House of Lords, 2018-01-08
Topic: Macroeconomics
Peter John Hennessy (Crossbench, Unknown): My Lords, why has it proved so tough for successive Governments to shape a successful industrial strategy that inspires, bites and, above all, endures? It is as if the framers of such strategies have been so many sculptors gazing at a rough-hewn piece of marble and discerning in it the outline of a beautifully cut statue, there for the crafting, but the resulting piece of work never quite fulfils the hopes of those who created it However, it is a fine and, indeed, noble ambition. As other noble Lords have reminded me, the White Paper before us is the eighth attempt at achieving it since the Second World War. One of the great treats of the debate has been hearing the grandfathers of previous ones explaining what they did, and why and how they did it. I remember as a young journalist on the Times following the political career of the noble Lord, Lord Heseltine, from department to department and noticing that he created an industrial strategy in every department he touched, whether or not it was the policy of the Cabinet to have one in the first place. I watched with great admiration how he did that. The impulse has been within him, I suspect, since school. I would not know; maybe he will tell us All the strategies since the war, in their different ways, have involved the best and the brightest in the ministerial suites and policy divisions of Whitehall, as well as those called to the colours from the worlds of industry, commerce, education, science and technology, to help find the multiple and interlocking elements that might lift our economy on to a higher trajectory of performance and growth. Surely, amid the mixture of activities in factory, lab, school and university over the past 71 years since the Attlee Government set up the Central Economic Planning Staff, somehow we could have found the elixir needed to reach, for example, the 4% annual growth rate to which both mainstream political parties pledged themselves—how we would settle for that today—in the early days of NEDO in the early 1960s. We never achieved it, apart from the odd short-lived spurt The key ingredients of the problem, which have been well rehearsed by your Lordships today, have been known and analysed, from the Attlee/Morrison/Cripps model of the late 1940s right through to today’s White Paper. They have been poked at and prodded in all the strategies in between as well. What are these deeply ingrained and highly resistant problems that have held back both our society and our economy? There have been three of them and they are interlocked. Several noble Lords have covered the terrain already The first is the shortfall in technical skills compared to our needs at home and our competitors abroad. This has been recognised as a UK problem for at least 150 years. The parliamentary commission on endowed schools was hugely impressed by the technical high schools of Prussia. Reporting in 1868, it said that, "we are bound to add that our evidence appears to show that our industrial classes have not even that basis of sound general education on which alone technical education can rest … and unless we remedy this want, we shall gradually but surely find that our undeniable superiority in wealth and perhaps in energy will not save us from decline" What extraordinary prescience I cherish the memory of Rab Butler, a great and decent man, but the single greatest missed opportunity was probably the remarkable Education Act 1944, of which I am very fond—it gave me a superb grammar school education—and many others would not be in this Chamber without it. But in it was the provision that, above all, might have avoided the need for this White Paper and this debate. It was for technical education to take off but the technical schools never flourished. They never taught more than 2% of the age group in the post-war years. As for the county colleges, which were going to be set up for FE training—sandwich courses, as we now call them: part-time day release—they were never set up. There within the provisions of the Education Act 1944 was the key remedy on the skills and technical front, but it was not to be The second ingrained problem is the difficulty we so often find in industrialising our top-flight science and research. One might call it the "thought in Britain but not made in Britain" syndrome The third factor is the low productivity that results from the other two, which leaves us so often trailing in the wake of the world’s leading industrial nations. According to the White Paper, we have but 12 years to break these malign talismans of economic underperformance. As the White Paper says in its concluding section, "Britain and the World": "Our aim is that by 2030 we will have transformed productivity and earning power across the UK to become the world’s most innovative economy and the best place to start and grow a business, with upgraded infrastructure and prosperous communities across the country" Amen to that shining set of aspirations. I think it is the only one that we can all sign up to, whatever our political or non-political affiliations, our economic philosophy or our leaver or remainer instincts. I was delighted when the noble Lord, Lord Mandelson, indicated that there was, with luck, a consensus waiting across the political Benches on this very question, if on no others It is a rarity in our current political landscape to find the possibility of genuine consensus on anything. Our Brexit-infected political ecology has left us, as a very wise friend of mine puts it, as a people seemingly on permanent grudge watch—always looking for things to fall out over rather than to fall in about. This White Paper could be the great shining exception. But signing up to an aspiration is one thing, dancing the multiple steps needed to achieve it quite another. The proposed industrial strategy council, the creation of which I warmly applaud, will need to keep a close watch on all the moving parts of the strategy and the ills it is designed to combat, especially those three horsemen of economic underperformance on which I have concentrated I hope that this White Paper might be seen by posterity as one of the master policy documents, such as the Beveridge report on welfare in 1942 or the Robbins report on higher education in 1963, but it has to shine—quickly—as the charter of a great shared national endeavour, because that is what we need it to be, with a dash of real inspiration that reaches into boardroom and production line, trade union and trade association, classroom and lab alike. In so many ways it is a question of spirit, optimism and, above all, tenacity. How we need it to work. The margins within which we are going to operate as a people, a society and an economy are tight and tightening, as the noble Lord, Lord Heseltine, so eloquently warned us earlier. Much, though not all, of the remedy lies in our own hands, in our hearts and our minds, and in our skills and our ingenuity. It is time for all of us to rise to the level of events and finally find that elusive statue lurking in the marble.