Siemens has always believed that the UK needs a long-term strategy to strengthen its industrial landscape, to prioritise resources and give business the certainty to invest. This is turn will help with economic growth and other policy priorities such as net zero and the need to share growth more equally across the country.
For this reason, I was pleased to participate in the first meeting of a newly formed Investment Council, to advise the Government on increasing inward investment into the UK. In the discussion at the Council, the point was made by many participants that business craves stability from government above all else, whether that is on policy, tax, or infrastructure investment.
Siemens was very supportive of the 2017 Industrial Strategy and, with others in industry, feel that it is important that the Government’s revised strategy, The Plan for Growth, maintains continuity. I think that message has now been understood. It was reassuring that in March, the Chancellor and Business Secretary wrote an open letter to business explaining how the Plan for Growth will build on what came before, not start from scratch.
Clearly, there are some consistent strands running through both documents. For example, the three pillars of the Plan for Growth – infrastructure, skills, and innovation – are key to tackling the UK’s long-standing investment and productivity challenge. The objectives, particularly the desire to level-up growth and enable the transition to net zero, are the right ones, as I have written in previous blogs. It is pleasing too, that existing Sector Deals will be continued and the 2017 ‘Grand Challenges’ will be reassessed as part of a forthcoming Innovation Strategy
Taken together with previous announcements like the Prime Minister’s 10-point plan for a green industrial strategy, the Energy White Paper, and the more recent Industrial Decarbonisation Strategy, as well as developments like the National Infrastructure Bank or the recently announced ‘Super-Deduction’ on capital allowances, it is possible to get a clearer sense of what the Government wants the post-Brexit, post-Covid economy to look like.
Leading from the front
As one of the major industrial organisations in the UK, we fully understand the need for both government and industry to work constructively towards common goals. The development of the offshore wind sector, in which Siemens played a key role, is often cited as an example of how a modern industrial strategy, should work. Here, the government set out an ambition to grow the sector in the UK and set (largely!) long term, stable policy accordingly (particularly through Contracts for Difference), which gave industry the confidence to invest and has driven down costs significantly.
More recently the Ventilator Challenge and the vaccine rollout are examples of how government and industry can work together and quickly to achieve positive results.
This is not to say that there are not areas for improvement. I think that the Government may regret disbanding the Industrial Strategy Council, for example, which played a significant role in scrutinising and correcting progress on the previous Industrial Strategy. I hope that the Government can find an alternative mechanism to allow independent engagement and scrutiny of its progress. While I am now part of the advisory Build Back Better Committee, we lack the statutory power to hold those targets to account, and it’s something that I will continue to raise with Ministers.
I hope that the Government will continue to refine its narrative, focus on a more limited number of areas, and ensure that all parts of government feel ownership of the Plan for Growth, with Ministers talking about it to business and potential investors at every opportunity. This is everyone’s plan, or no one’s plan, and it will take engagement from throughout the government and industry to get right.
Here we have a lot to be optimistic about and the role of cooperation and our work with regional councils, LEPs and mayors is where we can tangibly show regions levelling-up and taking the initiative, away from overly dominant central control.
One such example is the work that Siemens is doing with the Greater Manchester Combined Authority and the Greater Manchester Local Enterprise Partnership on the topic of innovation. We believe that the ‘Innovation Greater Manchester’ plans offer a blueprint for a specific invention and innovation ecosystem that can not only benefit locally but deliver on our global ambitions. Initial projections show that it could create 100,000 jobs and boost the economy by £7bn. Businesses would be supported to grow and drive economic development, resulting in updated skills, good employment, and places where people want to invest. As a Rochdale lad myself, it pains me to see that towns in Greater Manchester are consistently named as the most deprived in the UK. By aligning R&D investment with socioeconomic need, Innovation Greater Manchester would deliver sustainable and inclusive growth where it is most needed.
Looking forward with confidence
It’s been a difficult period for all of us in industry, with the trials and tribulations of Brexit and the economic impact of Covid. But I don’t believe we face a repeat of the industrial decline experienced throughout the 80s and 90s in Britain. There are signs of an economic recovery and huge opportunities in a range of existing and new technologies and services.
This is a time to cooperate more than ever; business pressing government hard on the size of its ambition, but also taking on the risk and walking through the doors when opened.
Siemens will stay fully engaged and supportive of the ongoing plans to drive this country into the fourth industrial revolution and build on our excellent foundations for growth, equality, and sustainability.