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Will Industrial Strategy find its place in Birmingham?

Will Industrial Strategy find its place in Birmingham?

🕔24.Jul 2017

Greg Clark, the Business Secretary, visits Birmingham today along with his ministerial team as part of the build up to publication of an Industrial Strategy White Paper expected in the Autumn. Chamberlain Files understands the minister will announce a small pot of money to test some ideas in the Green Paper.

Whilst the Green Paper was broadly welcomed when published earlier this year, it lacked much by way of detailed strategy. Many responses to the Business Department, BEIS, said the final version needed to be more clearly “place-based.”

In a speech to a Local Government Association forum of councillors last week, Mr Clark said the Industrial Strategy would give councils an “almost constitutional” role in the strategy. In the Conservative manifesto, the party indicated local enterprise partnerships would have a key role shaping and driving the Industrial Strategy in their areas.

The Local Government Chronicle reports the Business Secretary saying:

The industrial strategy with me steering it is determined to have the importance of councils and local leadership absolutely at the heart of it.

READ: PM ‘steps up’ with modern industrial strategy:

PM ‘steps up’ with ‘modern’ industrial strategy

Andy Street has a strong relationship with Mr Clark, so the West Midlands Mayor will no doubt be working to ensure regional priorities are reflected and that he and the WMCA have scope within the Industrial Strategy to further their objectives.

The Mayor has already welcomed this morning’s announcement of a £246M investment into battery technology as part of the Government’s ‘Faraday Challenge.’

Centre for Cities, the influential think tank with close links to the Business Secretary, recently published 10 ideas for a successful place-based industrial strategy.

It said:

…place should be the over-arching framework on which the strategy is based – and that cities in particular are where the [other] nine pillars of the strategy will come together.

The Centre hosted a presentation by respected economist Professor Diane Coyle of Manchester University, who is serving on the Industrial Strategy Commission, last week.

Prof Coyle pointed to what might now be familiar to Chamberlain Files visitors as signals of fundamental weaknesses in the economy, such as productivity, skills, investment and the national current account deficit. She labelled the UK a “floating hedge fund.”

Over centralisation was, of course, a key theme with the academic pointing to data showing the UK as the most regionally imbalanced economy in the current EU28.

The Professor of Economic Enlightenment referenced successful aspects of recent industrial policy, from the creative (notably the BBC where she was Vice Chair) to the higher education sector, pharmaceuticals to automotive as well as the City of London.

READ: Coyle – Channel 4 move to Birmingham would be “madness.”

Priorities Prof Coyle wanted to see in the White Paper were:

  • Decarbonisation
  • Infrastructure
  • Health and social care
  • Environment and long term investment
  • High value industries
  • Growth outside South East England.

On the issue of ‘place’, Prof Coyle underlined the importance of agglomeration economies and specialisation as well as looking beyond first tier cities like Birmingham and Manchester. She also highlighted the need for Government to radically improve the level of data collection in ‘places’ to somewhere near the depth of statistical information available in other countries.

READ: The making of an industrial strategy is hard work.

The making of an Industrial Strategy is hard work

Key points in the Centre for Cities list include:

  • The industrial strategy should be about cities not sectors – industrial policy should tackle the issues making some cities less productive, rather than focusing on sector deals.
  • Policy needs to look at what influences business location decisions, and address the barriers that prevent businesses from starting up and expanding in some parts of the country
  • Be wary of discussions around public sector relocation – evidence suggests that the BBC and ONS relocations have had a limited wider impact on the economies of their host cities.
  • Skills needs to be a top priority everywhere – cities that cannot offer businesses a pool of high-skilled workers will struggle to attract the kind of knowledge intensive firms which offer the best prospects for future economic prosperity.
  • Focus on supporting agglomeration in a range of industries, not sector-based clusters – policy should concentrate on how cities can support greater agglomeration of firms in a range of different sectors – and make the most of the knowledge spill-overs and innovation that this enables – by acting on the strengths and weaknesses of their economies.
  • If industrial strategy is to work, it should be crafted by cities, not just Government….
  • But not everything should be devolved to cities – the UK is the most centralised country in the developed world, but some policies are more appropriately designed and delivered at the national level. HS2 is clearly a national policy that needs to be developed and led by national government. But…station location decisions taken by HS2 need to be informed by the wider economic impacts that they will have on the future prosperity of those cities.

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