The UK government is closing a deal with Tata-owned Jaguar Land Rover to set up an electric vehicle battery plant in Somerset in a bid to future-proof the Post-Brexit UK economy. However, the question remains: will one-off deals like this be enough to keep pace with the ambitious industrial strategies of the US and EU?
Jaguar Land Rover: Potential Deal with UK Government
The tentative deal comes with an exchange of about £500m in subsidies. However, the luxury automobile manufacturer previously raised concerns over Brexit tariff rules, asserting that such regulations could render production in the UK unviable.
“This is not the only time ministers have been warned about the effects of Brexit on investment,” the press release informed. The UK’s decision to exit the EU reportedly comes with a cost of approximately £100bn annually in output.
Brexit’s Impact on UK’s Industrial Strategy
Nearly half of the top 100 UK manufacturers have confessed that their EU suppliers exhibit growing reluctance in conducting business within the UK. Such deals seem like desperate attempts to “woo back capital flight,” unless they become part of a broader, joined-up plan. The investments must align with commitments to decarbonise transport and supply chains across the economy.
US and EU: Leaders in Industrial Strategy Investments
When it comes to sustainable industrial strategies, the UK faces steep competition. The US and EU are augmenting their investments in this regard. The US’s strategy could lead to an investment accumulation of around $3.5tr over the coming decade, while the EU’s largest-ever stimulus package aims at constructing a green and digital future.
Shifting Focus: The Need for a Consistent UK Industrial Policy
Unfortunately, the UK seems to be moving in the opposite direction. The country’s industrial policy seems to sway with every change in administration, leaving little room for consistency and long-term growth.
A beacon of hope in the shifting sands of the UK’s policy is the goals of ending the sale of gas-powered cars by 2030 and achieving net-zero carbon emissions by 2050. There is also a possibility of linking the Jaguar deal to an incentive package that encourages the decarbonisation of Tata’s steel operations in the UK.
Towards a Greener UK: The Vision for a Green Industrial Revolution
To shift the struggling economic trajectory, the UK needs to engage all sectors, including the automotive industry, in an ambitious effort towards a more sustainable future. This move must provide businesses with long-term certainty and be inclusive in nature.
Taking Inspiration from Successful International Practices
Countries like Germany and France have demonstrated forward-thinking approaches to industrial strategy. The UK government must learn from these examples, forming symbiotic partnerships with the private sector and investing in the state’s capacity to create mission-oriented policies.
“Backroom deals are no substitute,” the press release underlined, urging a clear direction, coordination of investment, and innovation around bold goals.
In Conclusion
As the UK navigates its post-Brexit landscape, the need for a comprehensive industrial strategy becomes more critical than ever. Only by aligning its industrial policies and investment strategies with a sustainable future can the UK hope to emerge as a competitive player on the global stage.
We invite you to share your thoughts in the comments below. How do you think the UK should shape its industrial policy post-Brexit? How can businesses and the government work together to form a greener and more inclusive economy?
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