The Confederation of British Industry (CBI) have been long-term advocates of a sector based industrial strategy that enables individual industries to engage directly with Government to resolve structural issues.
At their conference in May, the Director General of the CBI, Carolyn Fairbairn said that:
Industrial strategy needs to be by sector because that is how the world thinks and acts. And that is how our competitors are thinking and acting. It’s about co-funding from Government and business in a partnership of equals.
The Government has not yet indicated the extent to which their industrial strategy will follow a sector based approach. For further information on this type of industrial strategy, see the later section in this note on the Coalition Government’s approach.
Richard Lambert, a former Director General of the CBI argues for a targeted industrial strategy:
We do not need an industrial strategy for dying businesses such as steel, or for those like retail that flourish without direct government involvement. We do need one for sectors like aerospace, defence, life sciences and energy, where government is bound to play a part in success.
The British Chamber of Commerce stated:
We welcome the fact that BIS and energy are in one place, and hopefully the industrial strategy will reflect a focus on long-term thinking.
The Institute of Economic Affairs, a think tank, has expressed scepticism of the Government’s approach so far. In a post entitled Beware May’s industrial strategy, they argue that:
Britain does not need an industrial strategy, unless the term is interpreted so narrowly as to mean no more than a determination to ensure that the prevailing regulatory and tax climate is one in which businesses of all types can flourish.
Geoffrey Owen, the former editor of the Financial Times, argues against an overly active industrial strategy:
There is little evidence that the revival of industrial strategy in recent years has improved UK industrial performance. It may or may not do so in future, but that in itself should be a warning to the present government.
