The Business Secretary stated that government needs to take a radically different approach to industry in order to build a different kind of economy.
Speaking at the Institute for Public Policy Research in London today, Vince Cable said that the manufacturing sector was essential to creating an economy that “benefits from the growth of Asia, rather than finds it a threat.”
In an attack on banking, Dr Cable insisted that the UK’s economic recovery is “led by business investment, not property speculation. One that spreads prosperity throughout the country, not just in one corner.”
Following the government’s £2.3bn investment in the Regional Growth Fund (RGF), in which almost 40% of the funding has gone to manufacturers out of the amount £1.3bn already approved, Cable advocated interventional government policies to support a proper industrial policy.
Business leaders have long been frustrated by short-term thinking on business, due to nature of long R&D cycles and return on investment times from investing in factory efficiencies. Cable now hopes to change this with a long-term planning that will think about the next decade, rather than short-term periods.
Cable commented: “Business is telling me that the UK is missing big opportunities in the global market place because we have swung too far away from industrial policy. We have to try to develop a strategic vision for where our future industrial capabilities should lie, and how to deliver it.
The Automotive Council was pointed out as an example of how to set up a successful long-term relationship between government and industry after the drastic turnaround in the automotive sector which directly employs 135,000 people and generates over £10bn for the UK economy per year.
Cable commented that this is largely down to the massive investment into UK plants and R&D facilities by Ford, Jaguar Land Rover (JLR), Nissan and others, funding that came because of clarity between government and industry.
After the recent move to purchase four vessels for the Royal Navy from South Korean firm Daewoo Shipbuilding and Marine Engineering, Cable acknowledged that the government has been short-termist in its procurement, focusing on cost rather than on supporting UK industry.
“By contrast, our key competitors in Europe view public procurement as an integral part of their industrial strategy,” said Cable.
Cable commented that starting this April, public procurement pipelines for each industry sector will be updated twice a year to allow companies to plan for the long-term.
View The Manufacturer’s recent interview with Vince Cable on the devaluing of engineering courses in schools and government contracts for British firms here: https://www.themanufacturer.com/articles/vince-cable-anxious-over-the-devaluing-of-engineering-courses-in-schools/