By and large, the Eurosceptic right of the Party is happy with Theresa May’s first Cabinet appointments, since she has placed Brexit in the hands of big hitters who campaigned for it: David Davis, Liam Fox and Boris Johnson. But on the whole, it doesn’t much like the sound of the “proper industrial strategy” which she promised at the launch of her campaign at its aborted membership stage. In her speech, May lamented the sale of Cadbury’s to Kraft and lambasted the near-sale of AstraZeneca to Pfizer, arguing that “transient shareholders – who are mostly companies investing other people’s money – are not the only people with an interest when firms are sold or close. Workers have a stake, local communities have a stake, and often the whole country has a stake…A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain.”
The new strategy has just taken its first test within the first few days of May’s premiership, and either passed or failed it, depending on one’s point of view. Over the weekend, according to today’s Times (£), she “personally approved the sale of ARM Holdings, a microchip design company based in Cambridge that supplies technology to Apple, to Softbank, the Japanese multinational”. Three previous bids by the latter were rejected. The new Prime Minister consulted with Philip Hammond over the weekend. Softbank has now promised that it will retain the headquarters in Cambridge, double the British workforce within five years, keep the brand and maintain ARM as an independent subsidiary. The paper reports concerns about the deal, including possible brain drain and ARM business moving from the UK. But whether one likes it or not, there is no doubt about the outcome. Although May was involved in the deal, it shows policy proceeding more or less as usual – in other words, demonstrating the openness of Britain to the ownership of big firms from abroad.
The Prime Minister insists that all foreign takeovers of British companies will be reviewed by the Government – which brings us to the man at the head of the new Department for Business, Energy and, yes, Industrial Strategy: Greg Clark. It wasn’t easy to see, before the reshuffle, which Minister would take charge of the latter. Sajid Javid is by inclination a Thatcherite, for all his energetic intervention over Tata Steel. The older Cabinet members, Remainer and Leaver alike, are also children of the 1980s, in political terms anyway: Hammond, Davis, Fox, Michael Fallon. Clark is different. He first made his way in the Party as Iain Duncan Smith’s Director of Policy, helping to implement the Renewing One Nation programme. It was a pioneer of the social justice thinking in today’s conservatism that grows more mainstream as time passes: all five of the candidates in the recent leadership contest are signed up to it. The former columnist for this site is a highly intelligent pragmatist. And he will bring with him from CLG the biggest interventionist of all: Michael Heseltine.
To Clark falls the task of putting flesh on the bones of the nascent strategy – seeing through the mapping-out of “the established and developing industries that are of strategic value to our economy”; the identification of “training and skills capabilities”, and action to follow, such as more technical schools and discounts in tuition fees for students who want to study such degrees as engineering; the development of “clusters of industry”; buying British more often, and breaking down “the artificial divide between private and public sectors”. All these ideas, and more, were first floated by May in her seminal speech to ConservativeHome in 2013 – the first occasion on which she made a big speech outside her brief, thereby signalling her ambition to be Party leader and Prime Minister. It would be a mistake to believe that May’s thinking simply replicates that of another of our former columnists, Nick Timothy – now her co-Chief of Staff and the speech’s author. But one of his columns for us used almost identical language about the proposed AstraZeneca sale as that of his boss.
Government will always intervene in the economy. As May pointed out in that 2013 speech, it does so over immigration and migrants, for example – placing some in categories based on the country’s economic needs. New safeguards were put in place after the Pfizer bid to ensure that companies keep their words on safeguarding jobs. But there are new reasons to be wary of too restrictive a policy on takeovers. Britain needs new investment for the economics of Brexit to work. These are early days, but signs are encouraging: this morning, Allister Heath cites “the relocation of Ineos to Britain, the acquisition of Poundland by Steinhoff and Wells Fargo’s £300 million new HQ in the City”. An openness to the ownership of companies that work here by others that are based abroad is a necessary part of the package. Meanwhile, the other side of new trade deals will be an openness to goods from abroad that mirrors an opennes to our goods there. These may bring hard news in their wake for some of the people and communities that voted so fervently for Brexit.