Once Theresa May was appointed as the new Prime Minister of the UK, she didn't wait long to make changes in the government. Aside from the new cabinet appointments, there has also been a change in the structure of departments. The new PM has plans to deliver an ’industrial strategy', and to achieve this, there is going to be a merging of the Business, Innovation and Skills (BIS), Energy, and Climate Change departments into a new Department of Business, Energy and Industrial Strategy. The change has triggered mixed opinions around its efficiency, and many came up with the question - will there be more interference from the government in the business world?
The new office is going to be run by former Communities and Local Government Secretary Greg Clark, who swapped roles with Sajid Javid. Historically, politicians have had many plans on reshaping the department. According to the Guardian, in the 1970s, Tony Benn, a former Labour MP, thought that state ownership, planning agreements with companies and protectionism were going to resolve the problem of productivity in Britain. 20 years later, Michael Heseltine was actively promoting his interests of UK plc. And finally, when Gordon Brown was struggling to cope with the Great Recession in 2008-2009, he called on Peter Mandelson to do the job and provide support for key sectors.
This time, a newly appointed Secretary of State for Business, Energy, and Industrial Strategy, Greg Clark said: 'I'm thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading Government's relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.' So how is an 'industrial strategy' going to look in practice?
During her leadership bid, Mrs May mentioned that her plans include improvements to energy policy, corporate governance, and reaching more compromize on running public services. Specifically, she said that the focus will be on emphasizing the reliability of supply and lower costs for users, a better R&D policy to help businesses make the right investment decisions, building more houses to reduce the shortage and make them affordable. She added, there will be a 'proper industrial strategy to get the whole economy firing.'
It's undeniable that after the EU referendum outcome, the focus on domestic policies is critical, as the country has to prepare itself for the government with no safety net and likely downturn in economy in the short term. There are fears that, even though Mrs May started her leadership with confidence, her policies may turn into too much state intervention, which may further result in corporatism and favouritism in the future. There is, however, also hope that the new PM will deliver effective business solutions by supporting competitive capitalism, embracing free market economics, and avoid the temptation of intervening in the life-cycles of businesses.
There is a variety of ways to interpret an industrial strategy, but none of them would be valid before we start seeing real changes. One of the first steps to make it work, though, should be an attempt to describe their 'industrial strategy' in the most pro-market way possible.