The chief executive of one of Britain’s biggest industrial companies, Siemens UK, has accused the government of being as divided over its industrial strategy as it is over Brexit.
Jürgen Maier, who leads the German manufacturing firm’s operations in Britain, said the government’s industrial strategy had made progress since its launch in late 2017, but that more was needed to support manufacturers across the UK.
He raised doubts about wider Tory backing for the policy: “It is brilliant we have a Conservative government behind this. But let’s be clear the government is as split on this being the right thing to do as it is on Brexit.”
The industrial strategy is viewed as one of Theresa May’s top priorities for government since she assumed the leadership of the Conservatives in 2016. It is designed to boost the productivity of British business with the help of state support. It is also seen as a key plank for raising the pay of British workers.
Although now a flagship government policy, it marked a significant ideological departure in Tory thinking, after 40 years of reluctance to intervene in business and markets. Several business groups have spoken out over the lack of progress being made by the industrial strategy. Last summer, sources told the of tensions between the Treasury and the business department over funding for the industrial strategy.
Maier said he was concerned some sections of the party remained sceptical of state intervention and he warned that lack of government support for manufacturing over the past four decades were among reasons behind the Brexit vote.
He singled out the European Research Group of eurosceptic Tory MPs, led by Jacob Rees-Mogg, for a twin-track ideology opposing the EU and state support for industry.
Maier said: “My personal belief is that ideology has actually brought Britain to where it is today. In that we have actually deindustrialised too much”. He added that the effects had led to greater public discontent in former industrial centres.
British industry accounted for about a quarter of the economy in the 1970s before Margaret Thatcher spurred a period of deindustrialisation, leading to job losses and reduced employment prospects in former industrial centres. Manufacturing today accounts for about a 10th of the economy.
“I do have a different ideology that if we’re going to rebalance the economy. If we are going to create more well paid jobs, then we’re going to have to create a stronger approach to industrial strategy,” Maier said.
However, Philip Hammond supported the strategy during the last budget by raising the government’s commitment to spend a further £1.6bn on technology research and development. The government has also created a £1.1bn industrial strategy challenge fund to support future technologies.
Siemens has partnered with BT and other companies with the UK’s Digital Catapult – a government-funded hub in central London – designed to bring together small and large firms to support advances in the digital economy.
Speaking at a launch event for its Future Networks Labs, Maier said it would take time for the industrial strategy to work. He also warned that progress could be unpicked by firms investing less in Britain in the event of a no-deal Brexit.
Urging Britain to avoid a “hugely irresponsible” no-deal scenario, he said that Theresa May’s latest approach to seek changes to the EU withdrawal agreement would probably “run into a brick wall” before another solution was found.
He said that Siemens, which recorded annual sales of £5bn in the UK and employs about 15,000 workers across Britain, had ramped up stocks of critical supplies as the Brexit deadline draws nearer.
The company is stocking more components required for machines used in UK infrastructure, such as railways and food processing. “I wouldn’t word it stockpiling. [But] we have increased our stocks of some of those critical parts as part of our risk mitigation activities,” he said.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The whole of government is completely committed to delivering the UK’s modern industrial strategy as we leave the EU. It is already generating significant public and private investment, creating jobs and opportunity and driving growth throughout the country.”