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Theresa May’s Industrial Strategy

With Brexit on the horizon, Prime Minister Theresa May is set to reveal a more interventionist industrial strategy.

The 10 point plan includes focussing on ‘encouraging trade and inward investment’ in five sectors: life sciences, low carbon-emission vehicles, industrial digitalisation, the creative sector and nuclear industry.

Inspired by a model used in the automotive and aerospace industries, deals will only be available to sectors which manage to show that government support would help overcome their specific challenges.

The government intends to invest £170 million to create new institutes of technology and boost STEM skills (science, technology, engineering and maths skills), digital skills and numeracy.

Theresa May

 

As described by Business Secretary Greg Clark, the Green Paper will set out ways to tackles the problem that, ‘for many years, we have not been as good on technical education as our competitors’.

Many business leaders have welcomed the plan which will see them consulted on the industrial strategy proposals.

However, the University and Colleges Union (UCU) have described the proposals as little more than ‘another set of gimmicks’ that will result in limited practical difference.

May will also reveal a further £556 million investment in the Northern Powerhouse.

The Northern Powerhouse is a proposal to boost economic growth in the North of England

 

Among other investments, the money will provide a new innovation fund for businesses in Manchester and Cheshire.

However, the Institute of Directors (IoD) have warned against the government keeping ‘struggling companies going through cash payments’.

The Iod emphasises the long term importance of training individuals to ensure they are skilled appropriately for relevant roles rather than throwing money at failing businesses.

“Unless the government puts a lot of flesh on these bones this will be a strategy of spin rather than substance”, said Shadow Business Secretary, Clive Lewis.

Whilst Theresa May’s industrial strategy encourages movement in the correct direction, economists will be waiting to see whether these government commitments translate into practical improvements.