This article is taken from the April 2026 issue of The Critic. To get the full magazine why not subscribe? Get five issues for just £5.
You shouldn’t pick winners.”
It’s a phrase of devastating incantatory power; an invocation that paralyses thought wherever British conservatives and pro-market thinkers meet. Over the years it has stultified new thinking as effectively as a religious police enforces dress codes and behaviour. For evidence, we need look no further than the government’s “Industrial Strategy Tourism Sector Deal” from 2019.
Yes, tourism. Just savour that juxtaposition. Until very recently, the word “industry” evoked Charles Dickens’s Coketown: “the soul of business and the keystone of prosperity”. Tourism, meanwhile, is advanced by countries whose best days are behind them, content to become inhabitable museums. Come and enjoy our ruins, and imagine what we once were.
For we once were something very special indeed. A disproportionate number of the most significant inventions of the modern world originated in Britain. That long list includes civilian nuclear energy, the cash machine, ibuprofen and IVF, carbon fibre, and the fanjet. All were created here.
But as Martin Lawrence — an engineer and entrepreneur who is writing a book on British innovation — explains, Rolls-Royce and the family-run ejection seat manufacturer Martin-Baker are rare exceptions of British firms that lead global markets. In most cases, Britain did not harvest the economic rewards and social benefits of these inventions: they went to other nations.
Yet as Britain sped into a post-industrial future and surrendered its assets to global capital, it nevertheless wished to retain the dignity that the word industry conferred. Hence tourism now merited its own “industrial strategy”. One other aspect of the “Tourism Sector Deal” might shock anyone waking from a coma from 1975. It is written in a language as distant from post-war industrial policy papers as Chaucer’s Middle English is from the way we speak today.
“The government expects Tourism Zones to develop from stakeholder collaboration. Therefore in order to become a Zone, businesses, Local Enterprise Partnerships in England, Destination Management Organisations and Local Authorities will need to join together to develop a strategy for how they plan to grow their local visitor economy,” we learn. That’s a lot of meetings, Zooms and PowerPoints.
Here we can read the language of the winners of the post-industrial settlement: Blair’s new gentry class. Described in the anonymous essay in J’accuse, “The Posh Turn”, it can be seen doing what it likes to do best, which is sliding itself comfortably into new opportunities. A country now ashamed of making stuff excels in talking about it instead, largely to itself.
The utilitarian logic of globalisation, of open borders and free trade, is finally being questioned. But only in Britain does a fear of being accused of “picking winners” result in such trite nonsense as the “Tourism Sector Deal”. Merely suggesting that we make life a little easier for one sector, say petrochemicals, over another, like gaming or tourism, is to be avoided at all costs, lest it anger the utilitarian thought police of the SW1 think tanks. This has left us with the worst of all worlds.
Doing nothing is an industrial strategy too, just not a very good one. The UK plc was steered into super-serving the low wage service sector with “human quantitative easing”, or low-quality mass immigration. Are we condemned to an economy based on Deloitte and Deliveroo? Here “picking winners” does its job by closing down such questions.
A policy of laissez-faire that looked prescient in 1990 no longer looks like an adequate response following the collapse of confidence in globalisation. It was designed for peace, but an Achilles heel once one superpower became aggressive. Globalisation obliged electorates to live with the consequences of mass migration and hid the bill for destroying domestic industries. But eventually, the bill appeared on the ledger — the social cost of ruined towns that in America motivated working-class voters to return Donald Trump to the White House.
The leader of the SDP party, William Clouston, likes to ask: what if we had simply kept the factories open? Perhaps a lot of unwanted refrigerators and Austin Allegros would be filling landfill, you might retort, but Clouston points to the costs of servicing an ever-increasing welfare bill, ill health and a permanent underclass. Industry also gives a nation purpose, agency and security, as Poland’s success attests. Even Singapore derives a higher share of GDP from manufacturing and extraction than the UK.
So performative laissez-faire has proved very expensive. One senior think tank figure describes the task not as one of generating ideas, but largely one of “managing upwards”, telling the donor class what it wants to hear, and what it wants to hear is hits from the 1980s.
The banks remain incredibly hostile to UK businesses, particularly to SMEs
In that case, what can we do? Conservative thinkers who want to make a difference should welcome the challenge. We can start by recognising what we’re good at, so we have more of it. There is much to be learned from what has been tried and has failed. Banks remain incredibly hostile to UK business, particularly to SMEs. Martin Lawrence notes how one engineering firm he started was de-banked, out of the blue, when it discovered he was successfully exporting goods to the United States. The government prefers to cosplay as a venture capital firm, taking equity in speculative startups via the British Business Bank, whilst small firms are turning down orders because of a reluctance to lend. SMEs need reliable access to low-cost finance.
Technocratic supply-side twiddles, favoured because they swerve the accusation of “picking winners”, have an ambiguous record. Reviewing the outcome of more than £7bn of R&D subsidies in 2021, David Connell of the Centre for Business Research found that the strategy had only a “nugatory” impact. Self-funded business R&D as a per centage of GDP has fallen since the schemes were introduced, he noted. A much bolder strategy may be offering a ten-year amnesty from tax and red tape for every manufacturing firm.
Nor should governments forget the obvious. The UK suffers from the highest energy costs in the industrial world, and is seeing building-block sectors like petrochemicals close down. “Most Government policies are toxic to SMEs — tax, regulations, snarled up roads, nowhere for trucks to park overnight,” says Marcus Gibson, an expert on the SME sector and a former Financial Times journalist. SMEs provided the backbone of supply chains and spared Britain the worst effects of the interwar depression, he notes.
The innovation quango industrial complex, with its baroque language of stakeholders, needs to be dismantled. Few earn their keep. Bypass them completely and expand the Smart Grants programme — a Thatcher-era innovation as the Enterprise Allowance Scheme — which gave modest sums to around 300 companies to develop new products.
“Smart has been wildly successful,” says Gibson, who monitors thousands of SMEs. Lawrence helped awardees to network, pooling information on how to handle red tape, financing and export barriers. The university spin-out story is not quite as rosy as it looks: a common complaint from entrepreneurs is that it is constructed for the benefit of our academics. “Shell, Glaxo, Rolls, Croda should be helping to write any white paper,” says Lawrence. “Instead, they are produced by finance and communications specialists.” Tariffs on the goods China dumps on us are no longer quite so taboo.
But most of all, new thinking is needed in a moribund think tank sector that has now largely merged with the public affairs industry. It needs to hire scientific and engineering talent, look beyond the finance sector in which its donors made their fortunes, and forget about chasing American tech money, typically to the detriment of our own entrepreneurs, who must operate in the monopolistic conditions they set.
The young have lost their squeamishness about asking what we have become, says William Clouston. Dogmatic laissez-faire looks like an ideology for sentimental old men.
