Industrial Strategy

Industrial Strategy

Mrs May has said she won't accept a bad deal over Brexit - she would prefer no deal, crashing out of the EU and moving immediately to trading under WTO rules. If that happens she wants to develop a "Singapore-on-Thames" model - with light regulation and low corporate taxes.

So what is her industrial strategy to prepare for this? It seems to be "Keep calm and carry on" according to the recent green paper. For example, it suggests sector deals - such as the secret promises made to Nissan - a road trodden unsuccessfully decades ago, leading to the state shoring up uncompetitive industries and thereby stifling innovative firms. The report is filled with vague aspirations, such as regional rebalancing and skills development, and positions itself as a 'vision'. We don't need a vision we need plans.

What about the concrete statements Mrs May has made about the future? Can she cut corporate taxes? Not if she abides by OECD guidelines, so is she intending to break free of them too?

If she does tax companies less, we will have to make up the shortfall or cut back the welfare state even more brutally than is currently happening.

What about trading under WTO rules? Well, let's hope we don't step on Mr Trump's toes as he has already said that he will ignore the rules if he wishes to. Given that Mrs May seems to be banking on a sweetheart trade deal with the US, she should be watching him very carefully. A further concern is that, given how dominant the US still is in international trade, if they start acting outside the rules then other countries will too and the government's plan for Free Trade UK will become a pipedream.

Fortunately Mrs May does seem aware of the dangers of a hard Brexit. Clearly we have to be ready to just leave, as a negotiating lever, but she says she will try to retain the “greatest possible access to the single market” and some elements of customs union membership. She wants to have a transition period, phasing in changes slowly, and is open to continuing to pay into the EU.

Let us hope that she can rustle up the negotiators needed - and that the EU will play ball.