One month on, the wheels are already coming off the government’s industrial strategy
Today marks one month since the publication of the government’s shiny new industrial strategy. Businesses everywhere could hardly contain their excitement after hearing the scale of Downing Street’s ambitions.
So, what has happened since? Here are some of the highlights.
A biodiesel plant in Lincolnshire has been closed, as well as a nearby bioethanol plant. A chemicals plant in Teesside closed, leading to hundreds of job losses. The Lindsey oil refinery collapsed into insolvency – another few hundred jobs gone there, too.
Jaguar Land Rover has laid off 500 staff (the ones Keir Starmer boasted of ‘protecting’ only a few weeks earlier), while Nissan is planning to cut hundreds of jobs at its Sunderland plant. Lotus’ UK factor has also been threatened with closure.
At least there is some positive news for the UK’s second-largest listed firm, £160bn behemoth Astrazeneca. As we report today, the pharma business unveiled a new £37bn investment programme to build new factories and R&D facilities.
Except – not a penny of it will be spent in the UK, because it’s all going to America. Indeed, the one investment planned for Britain – a £450m Liverpool vaccine plant – has been cancelled, with the company citing a lack of government support. On top of that, Astrazeneca is also rumoured to be plotting to ditch London for a New York listing, which would be a devastating blow to our capital markets.
So far then, it’s a case of one step forward, two steps back for the industrial strategy. Of course, it’s only been a month and we can’t expect miracles, but the direction of travel does not bode well.
The business community likes the government’s pro-growth rhetoric. But there is a growing sense that trepidatious ministers change course at the slightest whiff of dissent, which hardly inspires confidence to invest.
The Chancellor promised no more big tax hikes after her painful £40bn raid in October. Now, it is a near-certainty that she’ll come back for more, after backbenchers spooked the Treasury into U-turns on spending cuts. The government’s ambitious planning bill turned heads when it was first released – but it was quickly watered down with more environmental red tape after the faintest whimpers from tree huggers.
When Rachel Reeves addressed Mansion House last week, she told City grandees that eliminating risk taking “had gone too far.” If only her cabinet colleagues had been paying attention.