Industrial Strategy

Lord Rooker Excerpts

Thursday 1st February 2024 Lords Chamber

[Lord Rooker (Lab)]

I was pleased to endorse the Policy Exchange paper published last week entitled Where now for UK Industrial Policy? by Geoffrey Owen, the former editor of the Financial Times. I encourage Ministers and shadow Ministers to study the paper and, above all, to listen to Owen and his contacts, as they themselves will have no direct experience of his lessons from the past, and from other countries.

There are warnings such as,

“the picking winners … of the 1960s and 1970s”

and the “apparent success” of Biden’s programmes. Of course, we should look at recent US and European experience, but we need to look deeper to see whether they are relevant to the UK. Owen gives an indication that the lurches in UK industrial policy can be assessed by the 18 changes in titles and responsibilities of the UK departments that have been the principal link between Whitehall and industry since 1970.

Previous policies have failed. I shall give a brief outline of Owen’s conclusions: do not imitate the EU; have government investment in R&D; and

“the UK’s newest funder, the Advanced Research and Investment Agency … ARIA is charged with supporting high-risk projects”

to have

“a transformative effect on the economy. But these will be calculated risks with a clearly defined objective, and the project will be terminated if not enough progress being made”.

When this occurs, there is a need to ignore the inevitable lobbying that will take place to create open-ended government support. Projects should not be made difficult to abandon. Do not enter a subsidy race with other nations. Do not use the term “strategic investment” for any sector without explaining in clear terms why one sector is more strategic than another. Furthermore, it is crucial to channel government support,

“on a competitive basis, allowing scope for new entrants as well as established producers”.

After his first stint at the Financial Times, Owen worked at the Industrial Reorganisation Corporation and British Leyland for the short period from 1969 to 1972. His report indicates some successes, but the story overall is not good. Manufacturing is not the same as in my early experience between 1957 and 1971—I am the oldest, most out-of-date chartered engineer still paying his subs in the House. It is vital, as my successor as MP for Perry Barr, Khalid Mahmood, says in his endorsement of the paper that we have a,

“consistent and predictable policy environment”

It is also vital that the tent is big enough and that Ministers and shadow Ministers are big enough to accept things invented by others. In this respect, the legacy of Dominic Cummings is the Advanced Research and Invention Agency, and this should be embraced and, I hope, allowed to flourish.