The times are over when we could easily overlook the economic, political and social cracks in this country. Brexit unearthed the social chasm between the former industrial heartlands and the inner cities, opening up serious questions over the last four decades of lassie-faire economic policy. The publishing of the Government's green paper on industrial strategy seems to be the first signs of a shift towards a more interventionist approach to the economy by the May administration and a welcome recognition of the need to 'build an economy that works for everyone'. But does the new strategy really speak to those left behind?
While industrial strategies were previously decried for 'picking winners', by sitting back we've left whole communities to become economically defunct. This hasn't been without social consequences, John Harris highlights that the working class communities that used to be the core constituents of progressive politics are now turning in their droves towards left and right wing populism. The new industrial strategy must address the regional disparities and aftershocks of economic structural adjustment that has had devastating impacts on many communities, this means addressing the disconnections in our social infrastructure as urgently as it attempts to bring in the much needed investment in 5G internet and artificial intelligence.
For too long we've clung to a vision of ‘grow first, redistribute later’; a view which has focused our investment in human capital towards a narrow band of individuals in high growth sectors, particularly financial services, who have been handed the baton to lead our economy. This one track approach has left too many behind, disengaged and disconnected from their local economies, languishing in poor quality jobs or with poor skills. We know that most of the people in poverty are actually in work. The Work Foundations Commission on Good Work rightly recognises the key role good quality jobs play not only for people's wellbeing and livelihoods, but for the success of the wider economy and to solving our productivity problem. A disengaged precariat isn't good for UK PLC.
A deeper connection with place in the industrial strategy could support the localised and spatial qualities of economic development. While the new industrial strategy talks a good talk on devolution, the importance of place still feels like an afterthought, squeezing into the 9th and 10th pillars (Though as Jessica Studdert of NLGN notes this is a step up from Osborne’s National Productivity Plan which had “Resurgent Cities” as items 15 of 16!). The announcement of Sector deals – where the onus is on businesses to seize the opportunity and make the government 'an offer it can't refuse' skews the strategy towards big business and is likely to offer little to those in SME's or the self-employed that now make up 1 in 7 of the workforce. To include everyone we need to start thinking smaller.
Communities which were once tied together by the forces of shared identity and economic interdependence have been slowly pulled apart through the fractures of globalisation. An inclusive industrial strategy could be at the heart of reviving these places, bringing the fragments of community together through a shared vision for the local economy. To do this, No 10 will have to go far beyond its current attachment to all that’s shiny and new. The RSA Inclusive Growth Commission's emerging findings highlighted that at least a third of the UK’s productivity gap is explained by productivity deficits in low-wage sectors, such as retail and hospitality. By focusing on high tech industries, the strategy misses the chance to really make a step change in the lives of those struggling in low paid work.
Brexit has brought the politics of the left behind centre stage; it is now impossible to ignore the close relationship between economic and social policy. While the industrial strategy is a welcome recognition of the need to ensure we have an economy that works for everyone, it doesn't go far enough to make that a reality. A truly inclusive industrial strategy needs to address the current disconnections in our social infrastructure and look beyond the high tech sectors. It should be a positive force, demonstrating true leadership and the best of partnership working needed to bring people together around a strong vision for their local community. The industrial strategy needs to create a place for everyone in the economy, the question is whether the white paper will truly create a place for the left behind.
Kersten England, Chief executive of Bradford Council outlines Bradford's commitment to inclusive growth in advance of the Inclusive Growth Commissions launch