Industrial strategy must focus on skills and infrastructure, not cash injections

The Government’s new industrial strategy must focus on getting the UK’s infrastructure up to scratch and ensuring companies can have access to the skills they need, rather than cash support for individual firms, business leaders have urged today. A new survey of over 800 members of the Institute of Directors shows almost 9 in 10 back the creation of a joined-up plan, set to be published next week, which the Government hopes will foster the “new industries that…will shape our lives in the future”*.

Implementing a long-term skills strategy is the top priority, with three-quarters of the firms surveyed saying it is ‘very important’. Nearly two-thirds say the same of improvements to infrastructure, while 6 in 10 call for the Government to accelerate the roll-out of fast broadband. In contrast, only 4% said cash support for at-risk large companies is ‘very important’.

If the Government does choose to support industries financially, IoD members would prefer this to come in the form of tax breaks to draw investment. If a large company or factory is at risk of closure, the most popular option among business leaders would be for Ministers to provide funds to re-train workers facing unemployment.

James Sproule, Director of Policy at the Institute of Directors, said:

“Earlier this week, the Prime Minister outlined a vision for a prosperous post-Brexit Britain that promoted innovation and the free flow of trade and ideas. The new industrial strategy can be a key plank of this vision. Leaving the EU is not the only way in which the UK will change in the coming years. As more jobs are taken on by robots or algorithms, and our population ages, it is vital we think seriously about the future of skills and training.

“The strategy must also focus on the physical infrastructure that businesses need to be competitive, not only transport, but also the broadband network, which many firms feel is too slow. On balance, our members favour improvements to existing infrastructure, and that will often mean essential but unglamorous road and rail upgrades.

“The new strategy is a chance to provide a positive environment for existing companies, but also encourage the upstarts which will develop the products and services of the future. It is painful to watch established businesses fail, but the Government should be very sceptical of its power to keep struggling companies going through cash payments. Instead, the focus should be on re-training anyone who becomes unemployed, so that communities can adapt to changes in the economy.”

*Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, speaking at the IoD’s Annual Convention at the Royal Albert Hall last September.

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