LEADING politicians from Labour and the Liberal Democrats yesterday promised manufacturers they will resurrect the idea of an active industrial policy, using the government’s influence and funds to support British business.
Labour leader Ed Miliband told the EEF conference that spending money to boost jobs, rather than just supplying good public services, is a patriotic policy, and that Britons should take more pride in UK manufacturing.
Meanwhile business secretary Vince Cable said the government will boost investment in new technologies and aid firms in obtaining overseas contracts.
“Government has a legitimate role in making choices and addressing the market failures that hinder the development of core technologies, especially during the innovation phase,” Cable said.
“It is often too risky, or simply too expensive, for an individual company to undertake the necessary investment in R&D by itself.”
Miliband denied that industrial patriotism amounted to “old fashioned protectionism”, arguing that supporting British firms with subsidies and contracts would boost the economy, not cripple the UK by supporting inefficient industries as industrial policies had in the past.
He also gave his backing to the “Made in Britain” campaign led by a manufacturing firm, arguing it promotes pride in British products and shows the sector is still a major force.
A future Labour government would see every government department focusing on pro-industry, pro-manufacturing policies, not just the department for business,innovation and skills, Miliband said, criticising current programmes, like the regional growth fund, as being patchy and inconsistent.
He pledged to set up a UK investment bank to support small business lending, and said government procurement would have to take into account “local jobs” under Labour.
Cultural changes are also crucial, Miliband argued, saying that Britain needs to be more like Germany in seeing the manufacturing sector as offering a worthwhile and well-paid career path for young people entering the workforce.
Speaking earlier in the day, Cable said the Lib Dems were open to cutting the 50p top rate of income tax – as long as it is accompanied by the introduction of a wealth tax to make sure the rich “pay their fair share.”