Mike Craven: Do we need an industrial strategy - and if so what would it look like?

Mike Craven is partner at Lexington Communications which sponsored this week’s ConservativeHome event on the Coalition two years on: ‘back to growth’. The business/political audience heard from Tesco’s Director of Corporate Affairs, Lucy Neville-Rolfe; Joe Greenwell, chairman of Ford in Britain; Business Minister Mark Prisk MP, Paul Goodman, and Elizabeth Truss MP. The event was chaired by Damian Collins MP.

Elizabeth Truss told Tuesday night’s ConservativeHome panel discussion that the free market is less popular in the UK than it is in China, Suspicion of free markets has undoubtedly grown in Europe since the financial crash (although voters are none too keen on the state either).

Politicians react to the public mood but it poses difficult issues for business. Tesco director Lucy Neville-Rolfe told of how on a trade delegation to China, a senior minister was superb in extolling the virtues of British enterprise and companies to his Chinese audience in a way that he would never do to a British one.

So business feels unsupported and ministers complain that companies are sitting on piles of cash which they decline to invest.

Yet beyond a slight tetchiness, ministers know they depend on business to deliver growth and companies broadly support a lot of what the government is doing. Ford’s Joe Greenwell applauded moves to rebalance the economy, the focus on manufacturing, foreign direct investment, tax competitiveness, apprenticeships and research and development tax credits.

Greenwell argued that they constitute an industrial strategy but the government is wary of using the title. He argued that bringing together the many separate good things the Government is doing and communicating them better with a clear theme would be a strong signal both to business in the UK and, more importantly, to corporate boards overseas who make decisions about where to invest.

Some Conservatives in the audience were more wary. The very notion of an industrial policy reeks of 70s style corporatism. As Mark Prisk said at the meeting, business, not government, creates wealth and governments need to avoid meddling. And, as Paul Goodman pointed out, a lot of what business needs – deregulation or infrastructure for example – are either a problem because of Coalition politics or so long term that they will have no impact on current economic performance.

You need look no further than aviation policy, a subject raised several times during the debate.  Private finance could deliver new capacity, yet all political parties are currently opposed to a new runway at Heathrow.

At a time of economic uncertainty, confidence is the key to unlocking investment. To stimulate investment and growth, the Government needs to do more to promote what it is already doing, whatever tag it wants to adopt. More ministers need to talk confidently about British success stories and about what they are doing to work with companies to boost exports and domestic investment.

There are ministers such as Mark Prisk who speak strongly about the successes of British business and articulate strategies for strengthening companies. But in today’s more hostile climate towards business, there aren’t that many of them. Conservative elements in the audience bristled as Peter Mandelson’s period as Business Secretary was lauded. The faces of the same people shone with delight when someone suggested that Boris was the best Tory promoter of free markets and British business. But the Prince of Darkness and Boris, both excellent political characters in their own ways, are both far away from where national decisions are currently being made.