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“I agree with Michael” – a consensus is emerging on industrial policy

Nye Cominetti

22 November 2012

Many in politics now seem to agree that the UK should have an industrial policy. Yesterday (21 November) I attended a Social Market Foundation (SMF) event during which Chuka Umunna and Michael Heseltine refused to budge from a position of agreement on - as far as I could tell - more or less everything. Indeed, I was left with the impression that Umunna would have been even less guarded in his lauding of Heseltine’s recent report were he as unconstrained by party politics as Heseltine. As chair, Evan Davis pointed out that Vince Cable also agrees with these two, which makes for a fairly serious political coalition.

Oddly, this agreement appeared to cloud the discussion somewhat. Davis struggled to move the conversation much beyond the lines of “the UK should have an industrial policy because all other countries do, and because the Government spends so much money that it may as well use that to good effect”. He tried to press the two on the exact tools each would use (i.e. what having an industrial policy actually means in practice), yet both resorted to saying that local areas should have more power and money to develop their own economies. It was also noticeable that both Heseltine and Umunna used a lot of examples and anecdotes and shied away from explaining in concrete terms when, why and how government should intervene in industry.

And this is the nub of the problem. Unless these commitments are reified, there is the danger that any political consensus will be superficial - liable to fall apart under the pressures of party politics (as with 2010’s “I agree with Nick” moment). Government interventions won’t always be successful, and it is very easy for opposition parties to make political hay from Leyland type mistakes if they are not signed up to a similar ideological approach to industrial policy.

Interestingly, both panellists suggested that industrial policy could become an apolitical policy area, and expressed a desire to “remove the politics” from decisions relating to supporting British industry. Devolving decisions locally would certainly help to achieve this, as would creating a professionally-run British investment bank, as would bringing more business people into the civil service.