I see the CBI is calling for the government to introduce a stronger industrial policy. This is an area which is receiving increasing policy attention following the supposed breakdown of the market-based approach.
Regular readers will not be surprised to learn that I disagree with attempts at industrial strategy. I suspect that any strategy which was ultimately implemented by government would be based on quickly outdated assumptions and lead to an inefficient allocation of resources.
If the CBI wants to rebalance the UK economy away from consumption and towards investment (as stated in the report), then it should ask government to introduce incentives to encourage private savings and investment. It should not ask for sector-specific interventions, which for me are more likely to distort activity and crowd out fresh private sector innovation and investment.
The CBI is calling for a strategy to help support incumbents, which is of course the CBI’s remit, but is not efficient or conducive to long term growth
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