Post-Brexit economy plan to be launched
The government’s industrial strategy is aimed at lifting slowing UK growth and productivity.
The government’s plan to boost UK industry ahead of the country leaving the EU is due to be launched later.
The industrial strategy is aimed at lifting growth, which official forecasts suggest will slow due to the UK’s poor productivity performance.
Business Secretary Greg Clark said the UK’s decision to leave the EU meant the strategy was “even more important”.
A deal with US healthcare giant MSD to open a UK research centre has been announced as part of the strategy.
Will the government’s economic medicine work?
The investment by MSD, known as Merck in the US, is worth up to £1bn and is expected to create 950 jobs.
The government said the announcement was “a huge vote of confidence” in its plans to boost the post-Brexit UK economy.
The strategy comes just days after official forecasting body the Office for Budget Responsibility (OBR) announced an aggressive downgrade of its UK growth and productivity forecasts.
Political parties and business groups have said that the solution to creating stronger growth and higher wages is more investment.
The industrial strategy is expected to outline similar partnerships to the MSD one with other private sector firms in the construction, artificial intelligence and automotive sectors.
The deals will see the government pledge funding and policy collaboration in exchange for investment from private firms.
Here’s the idiot’s guide to how it’s supposed to work.
Pick an industry that the UK is already good at and needs investment.
Chuck in a bit of government money, cluster the right institutions around it, commit to provide the skills base and give them somewhere to try their new stuff.
That could mean faster trials for drugs in the NHS or using public roads to test driverless cars.
Hey presto – private investment ensues.
Some will see this as another example of government’s dodgy track record in “picking winners” – the government insists it is backing excellence.
Of course, all of these new initiatives are being born under the star sign of Brexit which makes them children of uncertainty.
The government said the deals would be “strategic and long-term partnerships”.
It has already pledged to invest an additional £80bn in research and development over the next decade.
The additional funding is aimed at putting the UK’s investment in this area on a par with other advanced nations.
Currently the UK spends 1.7% of its gross domestic product on research and development, much lower than the 2.4% average of developed countries in the Organisation for Economic Co-operation and Development.
As part of its industrial strategy, the government is also expected to outline the main global trends which it believes the UK needs to tackle to revive its flat-lining productivity.
These are expected to include artificial intelligence, clean energy such as low carbon technologies, medical care for an ageing population and future mobility such as driverless cars and drone-delivered goods.
“More decisions about our economic future will be in our own hands and it is vital that we take them,” Mr Clark said.
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