Economic recovery in the UK calls for planning and government intervention comparable to that at the end of World War II, say leading business organisations.
Make UK has called on the government to set out a long-term industrial and economic strategy on a scale not seen since the Marshall Plan, while the CBI said the combination of Brexit, COVID-19 and climate change called for an economic response “more like 1945 than 2008” to create an ambitious vision for the UK economy in 2030.
The government should use next month’s Budget as a starting point for a strategy to take advantage of the UK’s science base and growth in new technologies, said Make UK. Its call came against the background of its latest Manufacturing Monitor tracking survey which shows that companies are preparing for a longhaul recovery from the Covid-19 pandemic. The survey found that 29% of companies believe it will take a year or longer for normal trading to return; only a quarter are operating at full capacity, and over a third have suffered decreases in sales and orders since the start of the latest lockdown.
The manufacturing organisation said that tactical measures would still be needed in the Budget to support companies in the short-term. But there was an urgent need for “a change in mindset” from the government to think about how the UK could benefit from digital technologies, innovation derived from academia, and growth opportunities from the transformation to a net zero economy.
Make UK chief executive Stephen Phipson said the country was at a crossroads. “Looking to the long term we need to lift our horizons to how we can transform the economy. This will require a different mindset in the government from believing we can achieve growth simply through diverging from EU regulations. Instead we need an industrial strategy and vision on a scale not seen since the Marshall Plan which identifies new technologies and market openings that will benefit from enterprise-friendly policies on taxation, research and development, infrastructure and regional investment.” He called on the government to work with industry “to harness our world-class academic science and innovation base”.
CBI director-general Tony Danker, in his first keynote speech as director-general, drew an analogy with the post-1945 recovery. “The scale of the shocks we’re facing today – Brexit, Covid, and the climate imperative – demand a similarly dramatic moment of unity and foresight,” he said. There was a need for “a vision, a plan and a consensus as a nation to pursue it”.