Theresa May is to signal an era of greater state intervention in the economy as she launches her industrial strategy with a promise of “sector deals”, a new system of technical education and better infrastructure.
The prime minister will publish the strategy at a cabinet meeting in the north-west of England, naming five sectors that could receive special government support: life sciences, low-carbon-emission vehicles, industrial digitalisation, the creative sector and nuclear industry.
She will say the government would be prepared to deregulate, help with trade deals or create institutions to boost skills or research if any sector could show this would address specific problems.
The deals would be available only to sectors that organised themselves and made the case for government action, with May citing the automotive and aerospace industries as sectors that had successfully used this model.
Helping specific industries could be easier once Britain has left the EU because it may no longer be bound by state aid rules that restrict how governments of member states can support companies. The industrial strategy is also a marked change from the approach of the previous Conservative-led coalition, which took a more laissez-faire approach to the economy.
“The modern industrial strategy … will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success,” May said.
An “industrial strategy challenge fund” will help distribute millions of pounds for research and development in areas such as smart energy, robotics and artificial intelligence, and 5G mobile network technology.
The plan will also focus on the 50% of school-leavers who do not go to university. It will suggest maintenance loans for those wishing to pursue a technical education, the construction of institutes of technology in every region, and 15 core technical “routes” for students that train them in the skills most needed by employers in their regions.
The strategy will be guided by 10 pillars, including investing in science, developing skills, upgrading infrastructure and ensuring growth is shared across the country.
Asked about the relatively low amount of spending earmarked for the policy, the business secretary, Greg Clark, said it was meant to be “a consultation on what should be our priorities for a long-term industrial strategy”.
A large element of this was the government’s belief that the UK was falling behind nations such as China when it came to workers’ technical skills, he said.
“What we’re proposing here is that if we want to prosper in the future, if we want to achieve our potential, we think that a big priority has to be to improve our level of skills training,” he told BBC Radio 4’s Today programme.
Clark said battery technology, particularly for electric cars, was among the areas being targeted. However, he declined to confirm that the government had made a deal with Nissan on battery technology before the Japanese carmaker agreed to keep investing in the UK.
The strategy also formed part of the government’s post-Brexit strategy to keep others investing in the UK, he said.
The intention was “to say to investors, both in this country and around the world, what we are going to do to be competitive in the future – whatever the outcome of Brexit is. And this has been recognised, and has been greeted with enthusiasm by companies around the world.”
Carolyn Fairbairn, the director general of the Confederation of British Industry, said the strategy was a landmark opportunity. “It must help fix the country’s productivity problems and remove the regional inequalities that have dogged our country for generations, having a positive impact on living standards, wages and the future opportunities of many people,” she said.
However, the University and College Union (UCU), which represents more than 110,000 higher education staff, said it was little more than a “relaunched skills strategy”.
Sally Hunt, the UCU general secretary, said: “This is a drop in the ocean that will do nothing to solve the funding crisis in further education, which has seen 1m adult places lost since 2010. If government wants to support technical education, it should invest in our further education colleges, which desperately need thousands more teachers, rather than another set of gimmicks.”
The Joseph Rowntree Foundation charity said it should help young people in the longer term but the plan did little for those in insecure, low-paid jobs.
“Improving maths and technical education for young people will certainly benefit the economy in the future. But this is a policy for the long term,” said Ashwin Kumar, its chief economist. “Millions of people already in the workforce are struggling with low pay and insecure work … The government’s industrial strategy will only make a real difference to our productivity gap, and to people at risk of being left behind, if it goes beyond manufacturing and high-skilled roles.
“It needs to help the millions of people who work in low-paid sectors, live in low-skilled areas and work in low-productivity firms. Action to close the productivity gap and support people who lack basic literacy, numeracy and digital skills would help to achieve this.”
May will announce a £556m boost for the “northern powerhouse”. Among the projects to benefit are the Goole intermodal terminal to place the town’s existing rail, sea, motorway and waterway links in one site, and a £10m life sciences innovation fund for Manchester and Cheshire firms. Blackpool will get a new conference centre and hotel at the Winter Gardens to help re-establish the town as a leading conference destination.
May is launching the strategy on the same day as a report from a cross-party group of MPs urged more help for the steel industry, with seven policy demands including cheaper energy and action against Chinese dumping.
Stephen Kinnock, the Labour MP for Aberavon and a co-author of the report, said: “If we continue along the current path, characterised by a government whose attitude can best be described as a toxic combination of incompetence and indifference, we will see the further decline of the industry and our communities.”
He called for the government to “remove the existing disincentives to investment posed by a punitive business rates regime and crippling energy prices. The government must firm up procurement policies to support the British steel industry, support skills development, invest in R&D and build a partnership approach to industrial relations and management.”
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