Industrial Policies or Industrial Strategy: The Difficulty of Enacting Long-Term Supply-Side Reform in the UK

Abstract

The government's recent ditching of Theresa May's interventionist ‘Industrial Strategy’ and its replacement with the more amorphous and target-driven ‘Plan for Growth’ has dismayed many in industry. But in many ways, the move merely exemplifies the ad hoc, short-termist and ideologically driven nature of how industrial strategy has often been conceived and implemented in the UK since its rediscovery as an important tool of supply-side policy following the market-fundamentalist Thatcherite interregnum. This short-termism has sabotaged repeated attempts to move the UK economy onto a higher and more sustainable growth path and will likely hinder the government in meeting its objectives on productivity, decarbonisation and levelling up through reindustrialisation. The problem has both institutional and ideological causes, largely to do with Treasury domination of the supply-side agenda and its default market failure approach. This hinders successful adoption of the kinds of expansive, ‘mission-oriented’ industrial strategies followed more successfully in other countries and which could be transformative if applied in the UK.