Alexander Temerko is Deputy Chairman of the OGN Group.
At this year’s Conservative Party Conference, Theresa May spoke of the vital importance of industrialisation and ‘meritocratisation’ of the country. The two are closely connected. Industrial policy depends on the people formulating and implementing it; its success relies on the rule of meritocracy. Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, is to be the driver of this. However, he has yet to make the post truly his own or else, perhaps, the civil service has decided that bureaucrats must driving the industrial strategy – along with everything else.
As a man of industry myself, I understand the problem very clearly. The right things have been said, everyone has got excited, but nothing has really happened yet. The Department for Business, Energy and Industrial Strategy and the Minister in charge just do not seem to be up to the task. Clark needs to wake up and smell the proverbial coffee. After a refreshing shower, he should read the Prime Minister’s recent address to the CBI very carefully, and ask himself honestly whether he has enough enthusiasm, professionalism and, crucially, daring, to be the one to put into action the Prime Minister’s bold strategic plans.
If the answer is yes, he needs to look around and learn from what our neighbours are doing. Germany is actively working on its Industrie 4.0 vision, while we struggle with the first iteration of a new industrial policy. The Germans have pinpointed target sectors: they are investing millions into developing them, and creating the supporting infrastructure. They are also focusing relentlessly on job creation.
We need some of this mindset in Britain. We must play to our strengths and focus on key areas. Being a great island nation, our infrastructure has to start with ports. They must have robust modern warehousing facilities, as well as cargo loading and unloading equipment. Next, we should turn to our roads and railways. Infrastructure investment is talked about endlessly: but have we seen any real progress on HS2, for example?
Energy is the other part of Clark’s brief. The Government has given the green light to Hinkley Point C, but the solution is not just about building new generation capacity. We need an energy grid that is fit for purpose and due attention must thus be given to the National Grid. We also ought to look to other countries with cheaper energy and improve interconnection.
And then there is the matter of British technologies and jobs. We have to bring manufacturing jobs back to the UK, improve productivity and integrate the latest technologies. However, these vital things cannot happen while the Government is giving concessions to foreign firms that refuse to use British manufacturers, even when they offer a genuinely competitive option. This is the reality we are witnessing today. Take just one example from the North East, where my own business, OGN, is based. The Government has offered Scottish Power’s Spanish owners, Iberdrola, concessions worth £8 billion – paid for by the UK taxpayer – for wind farm development. Under pressure from the Spanish government, Iberdrola will then take the manufacturing work and associated jobs back to Spain. Clark’s department is stunned, and does not know what to do.
Essentially, this Government boasts that they have secured 3,000 Nissan jobs whilst, elsewhere, some 2,500 jobs in the same region are stolen by Spain. At the moment, BEIS is evidently not even capable of defending British industry against a direct attack – let alone promoting it actively. We may be great at discussing an issue from all angles, but we are useless at coming to decisions and taking action. Yet Britain’s industrial policy must become a reality, not just another consultation. If we start right away, we have about ten years to recreate the Japanese economic miracle in Britain and, once again, become a world-leading nation in terms of technological progress. It’s either that or resign ourselves to becoming the Italy of Northern Europe.
Harnessing the skills and real life know-how of the business community will be key in delivering this. Indeed, the Prime Minister has recently called on businesses to help her government. However, for this to work, we have to challenge our “infallible” bureaucrats. The battle for industrialisation and meritocratisation will first and foremost be a battle with the senior civil servants surrounding our politicians – civil servants who always prize caution above drive and daring. If Clark wants to become the man for enterprise, he needs to challenge his own bureaucrats. It’s either that or take their side – a tough choice for a good man, who probably does not want to wake up in that sort of reality.
At present, politicians operate within a sort of impregnable fortress, with civil servants blocking industry cooperation. This is no way to go forward. If the nation has voted for Brexit because it is tired of Brussels bureaucracy, so more domestic bureaucracy is hardly welcome.
It is time for new solutions and we need look no further for inspiration than one of May’s best-known pledges. We should not stop at putting workers on boards. There needs to be true partnership, not just between employer and employees, but also between the Government and businesses. It should actively bring business representatives onto relevant departmental boards.
Finally, we need a high-impact initiative to galvanise industrial strategy growth. In the past, Britain has hosted two major global exhibitions showcasing its trade and industry. Afterwards, it was an undisputed leader of the industrial revolution, pioneering modern manufacturing. Following these exhibitions, Britain not only became the empire on which the sun never sets, but also the driving force popularising the English language and way of life. Britain became the conduit for scientific and technological progress around the world in the wake of its industrial exhibitions and new technological advances. Now would be a good time to follow this example. I propose a third global exhibition in this country, which will enable us to select the technologies crucial to modernising our industry and keep our position as a global leader in scientific research.
Hosting an industrial exhibition as a new national project on the same scale as the 2012 Olympics would help to unite the regions, our people and our politicians. Crucially, it would create the foundation for Britain moving from an import-orientated country to an export-orientated state. We have the people to deliver a major project of this kind. For instance, Boris Johnson has extensive experience in organising major world events after his work on the London Olympics. Liam Fox, given his international role and his special relationship with the US, could also prove an invaluable asset.
Clark could learn a lot from his cabinet colleagues. I have just mentioned Johnson and Fox and, elsewhere, our military technology exports have also become a real success story. They now total £11 billion, and the Ministry of Defence, led by Michael Fallon, is working to increase that figure further. In short, it is time for BEIS and its leader to wake from its slumber and start turning policy into reality. I am not saying this just for the sake of criticism: this is about the long-term success of our party in government. We have a strong mandate and a party leadership, starting with our Party Chairman, who really “get industry. We have a Prime Minister who has set out an impressive, timely and audacious vision for industrialisation and will, I am sure, push it relentlessly. Both politicians and business leaders alike now have a once in a generation opportunity to make history. It must not be wasted.