MPs criticise UK government plan for economic recovery

A cornerstone of the UK government’s efforts at economic recovery after the coronavirus pandemic lacks clear direction, ministerial accountability or methods to measure its success, MPs warned in a report published on Monday. 

The House of Commons business, energy and industrial strategy committee expressed concern about the government’s plan for growth scheme, which superseded an industrial strategy set out in 2017 by the then prime minister Theresa May.

The strategy was scrapped by ministers in March, in a move the committee said was “sudden and unexpected”.

Darren Jones, Labour chair of the committee, said it had resulted in a “short-termist, unclear and unwelcome approach to industrial policy when business is crying out for long-term consistency and clarity”.

The committee said in its report that the plan for growth was “nothing more than a list of existing policy commitments, many of which are hopelessly delayed”. 

The government’s 109-page document about the scheme outlined plans on infrastructure, skills and innovation, as well as details of ministers’ “levelling-up” agenda to spread economic prosperity across the UK, and their commitment to reach net zero carbon emissions by 2050.

The 2017 industrial strategy was contained in a 255-page document that said its stated aim was to drive change to close the UK’s persistent productivity gap with competitor nations.

The committee’s report said it was not known whether the plan for growth would follow parts of the industrial strategy, or diverge from it. 

“It is not clear which ministers are responsible for delivery, how outputs will be measured or which aspects of the previous industrial strategy will continue and in what form,” it added.

This had left many businesses “unclear about the future of the UK economy”, the committee said. 

It also criticised the government’s decision to get rid of its industry strategy council, which oversaw the industry strategy and was chaired by Bank of England chief economist Andy Haldane.

The committee’s report, part of a wider inquiry into the UK’s prospects for economic growth after the pandemic, set out a series of recommendations, including a call for clarity on who was leading industrial policy in the UK.

It said the government should publish industrial policy metrics on an annual basis at local as well as a national level.

The report also suggested the government make a commitment to co-producing industrial policy with the devolved administrations in Edinburgh, Cardiff and Belfast as well as regional and local leaders. 

The committee acknowledged that many companies had found the industrial strategy inaccessible and not relevant to their day-to-day concerns.

Stephen Phipson, chief executive of Make UK, which represents 20,000 companies across engineering, manufacturing and industrials, said while there were “many laudable policies from government . . . and a renewed emphasis on science, technology and innovation as well as technical skills”, these were “individual and disparate and don’t appear to form part of a joined-up plan across government”.

“These initiatives need to be brought together and signalled as a fully fledged industrial strategy which manufacturing can get behind and help deliver with a decade-long horizon at the very least,” he added.

The government said that since the industrial strategy was published more than four years ago, “we’ve legislated to end our contribution to climate change by 2050, we’re forging a new path outside the European Union and we continue to fight the Covid-19 pandemic”.

“That’s why it was right to change our approach too, with our new plan for growth setting out the opportunities we’ll seize across the UK to drive economic growth, create jobs and support British industry as we level up and build back better out of this pandemic,” the government added.