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Industrial strategy is making a comeback in Britain. Over the last 30 years British politicians have been hesitant to back firms and industries, instead letting the market rule. This period of inactivity followed several unsuccessful attempts at industrial strategy. However, more recently industrial strategy is back on the table. Britain's chancellor of the exchequer, George Osborne, has pledged to "back sectors that are global successes," promising £1.6 billion of state cash to automotive, agri-tech, and aerospace firms. His plan also included tax relief incentives for high-end television and animation firms. In 2008 Peter Mandelson, a current member of parliament, was appointed as the Labour party's business secretary where he approved loans to many nuclear and automotive firms and assisted technology start ups, proclaiming that it was time for ministers and markets to mix. At first others were skeptical of Mandelson, but this month marks the publishing of the governments 2nd "sectoral vision." This vision was of the aerospace sector and included plans for a £2 billion technology institute.
4 comments:
British enterprises may finally feel confident that they can invest knowing that the government is also investing in their firm
This is an interesting shift in the overall policy of the British government, an institution that has most recently worshipped the practice of austerity measures. Perhaps the change is partially motivated by criticism of Britain's austerity policies? Regardless, I applaud the government's decision and hope this injection of business support will strengthen the economy.
This shift seems like a smart move for Britain. Especially the backing of the aerospace industry which has the potential to grow substantially in the next decade.
I think that Britain made the right decision here. Government investment is important for the health of the British government.
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