Why the industrial policy has become so important in the context of Brexit and came back on the government’s agenda after so many years of keeping it off?
In the wake of the Brexit vote, business leaders, policy-makers, and politicians were increasingly vocal about the need for new economic thinking for the UK to overcome its problems of stagnant productivity and gross regional disparities in economic performance. In 2016, for example, the average British worker produced 16 per cent less on average than counterparts in other members of the G7. So the number one priority for the governments of Theresa May and the following government of Boris Johnson had to be the industrial strategy, because the biggest problem facing the UK was a productivity problem. So, as soon as Theresa May became the Prime Minister, she established the Department for Business, Energy and Industrial Strategy (BEIS). It was a signal of her intent, I think, to put industrial strategy at the heart of Government. She said at that time that it was needed “to spread prosperity across the nation and so deal with the reasons that people voted for Brexit.” And actually the anniversary of publishing this Industrial Strategy came and went without any mention. The media will barely mention on it, politicians weren’t talking about it, but this should have been a big event. 2018 and 2019 provided little additional information about the Government’s plan to reach the stated target of 2.4 per cent investment in R&D by 2027.
After the end of transition period, which is due to last until 31 December 2020, Britain will be no longer bound by European rules against state aid. The UK government will become more autonomous in providing financial assistance to companies, for example in the British steel industry. Do you think that outside the EU rules, Britain will be more effective in pursuing its industrial strategy and improving productivity?
The five foundations of productivity – Ideas, People, Infrastructure, Business Environment, and Place – are each inextricably linked to the UK’s relationship with the EU. Take Ideas as an example – investment into R&D is at the heart of every strategy to increase productivity. Horizon 2020, the EU’s pioneering Research and Innovation programme, was one of the biggest funders of R&D in the UK (the UK participated in more EU funded research and innovation projects than any other country between 2014 and 2016). Reduction in the UK’s access to the single market, restriction on cross-border data sharing or loss of funding from programmes such as Horizon 2020 will curtail efforts to make the UK a world leader in R&D. So, there has never been a more important time to push ahead with an ambitious Industrial Strategy if the UK is to advance towards the aspirational objective of “building a [post-Brexit] Britain fit for the future.”
The Conservatives’ slogan “Get Brexit done” invites one to think about Brexit as a project to deliver. What conclusions can be drawn if we take this perspective to examine the Brexit process? May this experience change the functioning of the UK administration in future?
I can refer to a document called “The Conditions for Project Success”. A ten-year-old child could read that and understand it. Unfortunately, the British government obviously had not read this document, because had Brexit be considered a programme – it is actually a programme rather than a project – and had it followed very basic guidelines that our members would follow when initiating a project or a programme, they would have had a far better chance of successfully delivering Brexit. The former Chief Executive of the Infrastructure Projects Authority (IPA), Tony Meggs, described implementing Brexit as a “mega-programme”, and “the biggest, most challenging peacetime task the civil service has faced”. What we have seen recently is that lessons have not been learned. One of the first things that Boris Johnson announced after winning the elections was: “We are going to make it illegal to further delay the Brexit process”, tying his own hands. It is unheard of for a free trade agreement to be agreed in less than 12 months. So this decision of Boris Johnson essentially brings “no deal” back onto the table. And that means we go back to the problem of “we have 12 300 project delivery professionals, how many of them are going to be able to deliver the ambitious Conservative programme for Government?”. I am not saying that it started under the Conservatives, but throughout my career, which is predominantly since 2010, it has been Conservative governments. And all I have seen is example after example of government failure, because of “policy-based evidence making”, and it is like the tail wagging the dog, rather that the dog wagging its tail.
What other failures have been made in the context of Brexit and belong to the “policy-based evidence making”?
I would say another critical failure, in addition to the wording of the referendum question, was to trigger Article 50. Even though the parliament voted to trigger this article, the UK first of all didn’t know what it wanted to achieve. It didn’t know therefore how to achieve what it didn’t know what it wanted to achieve. So it didn’t know the what, it couldn’t tell you the why or the how. So triggering Article 50 essentially guaranteed a failure. Certainly it would have been good for the government to run simulations of the Brexit process. It seems as though they had contingencies, but evidently they did not have good enough contingency planning. And it goes back to the wording of the referendum question. The question was whether or not we want to leave: “yes” or “no”, but it wasn’t specified what Brexit was. Does that mean we leave, but we remain closely aligned? Do we stay part of the customs union? Do we remain involved in all of these pan-European institutions? Do we still share security? And so, because that wasn’t answered, that meant it has a knock-on effect – you don’t know what you are trying to achieve.
Was the 2016 referendum a turning point in the use of referenda in the UK? There were many concerns not only about the nature of the question, but also about the level of general informedness and misleading claims by the official campaigns. On the other side, there are still awaiting constitutional issues to be resolved, such as the Scottish independence or devolution of power.
Well, the Scottish government and the Scottish National Party already want a second referendum on independence, because they see that as a means of achieving their outcome of an independent state. And it seems they have a strong claim, even though the Conservatives were elected on a manifesto that is anti-Scottish independence. That is the million dollar question: “Would politicians think twice now about turning to a referendum?”. Well, it depends on what they want to achieve – it is going to remain a tool in their pocket. I think that the electorate is more afraid. And I think possibly few is going to be used again. Even people who were advocating leaving the EU, Jacob Rees-Mogg for example, right at the start he said there should be two referenda. One at the start of the process, then we negotiate the deal, and then there should be another one. That seem to me a far more legitimate and democratic process than just having one, where people vote either based on gut feeling, rather than being informed, maybe some of they are informed – you can never really tell. The problem is what happens if a second referendum delivered another small margin on the other side. That is why we should be looking at things like citizens’ assemblies and explore proportional representation.
Could you explain the functioning of citizens’ assemblies?
I believe that it was used in Ireland. You put together an assembly of people representing the demographics of the country, the age, the level of education, the class divide, the political affiliation. You put this group together and work through the problems and they become very informed, they almost become experts in the issue. And then they arrive at decision and you accept this based on the process. That seems to me to be far more legitimate than does a referendum of asking people who generally want money in their pocket, food on their table and a roof over their head.
Do you think that the EU referendum campaign in 2016 and the following elections, which proved to be highly negative campaigns (“hyper-charge negative campaigning”) and characterised by the use of misleading information, made the British electorate more susceptible to populism?
“Beware simple answers to complex questions”. And I think it is immensely complex – the question of Brexit, the reason that people voted for Brexit. For the last three years, people have been interviewed: “Why did you vote for Brexit?”. Lots of people changed their minds, lots of people said that it was because they felt they had chronic underinvestment in their local community, and they wanted to almost stick the knife into David Cameron and the political elite. But actually what they achieved was self-immolation, because the communities that are going to be affected first and worst by Brexit are the very communities that voted for Brexit. And it seems to me – I say this as a personal opinion – that voting in a Conservative government, with the majority of 80, following eight years of austerity imposed by a Conservative government, can only point to one thing. There is only one reason why it happened: they didn’t believe in Jeremy Corbyn’s vision for the future of Britain.
You mean the 2019 general election?
Yes. But you asked about the populism. I think one critical point to make is that politicians should never underestimate the British electorate. I think the vast majority of the British electorate understand the nuance of political claims made by politicians far better than they were given credit for.
But you must have heard about the skyrocketing number of people in the UK googling the phrase “what is the EU” in the morning after Britain voted to leave the European Union.
There is definitely many factors here. It could be to do with level of education, with the age and the demographics of the electorate. It could be to do with the electoral system, because we have got “first-past-the-post”. This further squeezed the results. I don’t know if you have saw, but under the proportional representation, the outcome would have been a Labour coalition with 18 Green MPs. So going back to the electorate, simultaneously while you cannot treat the British electorate as being stupid, this electorate is clearly very influenced by the media. They are clearly more ready to vote based on a personality. For example, to vote for a candidate whose first name they know, they call him “Boris”. His is not “Alexander Boris de Pfeffel Johnson”. They call him “Boris” and he is the sort of caricature and they voted for this idea. And they voted for three words: “Get Brexit Done”.
Do we observe the beginning of a new chapter in British politics, characterised by a drastic simplification of the realities and lacking a real deliberation process?
Just because something happens after something else, it doesn’t mean that it was caused by something else. Correlation does not imply causation, so it is very difficult to say. It appears as though the British electorate has voted in an almost presidential manner to reject Jeremy Corbyn and embrace Boris Johnson to “Get Brexit Done”. That appears to be the case, but I would argue that it was far more to do with the electorate feeling they could not elect Jeremy Corbyn – based on him as a leader, his ineffectiveness as a leader of the Opposition for three years, his lack of the clarity as to what his position was – personally and as a party. And this was contrasted with a very simplistic message from the Conservatives: “Get Brexit Done”. What does that even mean? Because like I have already said, even the referendum question three years ago didn’t tell us how can you get it done, if you don’t know what it is. The majority of 80 [MPs] certainly means that he has far more scope to decide for himself what Brexit means, but his first move has been to propose a law that is going to forbid an extension. And I just cannot understand that, it is like a chess master surrendering its queen in the first or second move.
Do you think that political campaigning based on evidence will become a rare thing in British politics?
This seems to be the case, however at the previous general election the Labour party stood on the manifesto that was “fully costed”, seemed to be credible, and yet Jeremy Corbyn wasn’t returned to power as prime minister, he didn’t beat Theresa May, but he increased Labour’s share of the vote. So it seemed to be a popular manifesto, but the same trick didn’t work again this time. People rejected this detailed costed, very ambitious manifesto in favour of “Get Brexit Done”. So it seems to be the case that people are going for this populist and simplistic slogan, however I suspect there will be a backlash. And in five years’ time, if this government will abandon the Fixed-term Parliaments Act, which means the prime minister can then call an election whenever he wants, he might call another election once he has delivered Brexit in order to get another five-year mandate. And if the Fixed-term Parliaments Act is repealed and it gives the prime minister this power to effectively call a general election, that is a massive constitutional reform that is increasing the power of the executive in an unprecedented way. But it could be the case that a credible leader of the Opposition, with a credible manifesto, would be much welcomed. Because the British electorate don’t like to be patronised. So yes, they voted for “Get Brexit Done”, on the surface it appears so anyway, but I would always urge caution, that actually the electorate may demand a lot more.
Stephen Rooney – Policy Manager at a leading UK Professional Body