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The politics of innovation have shifted – but Cabinet tensions are a barrier to unlocking the UK's potential

The politics of innovation have shifted – but Cabinet tensions are a barrier to unlocking the UK's potential
3 min read

The Conservative Party’s approach to innovation policy has dramatically shifted.

Only a decade ago, Conservative energy minister John Hayes argued that it wasn’t the job of Westminster or Whitehall to choose how to decarbonise our electricity system, to choose nuclear over gas, or solar over wind. Rather it should be left up to the invisible hand of market efficiency. Government’s job was to create a transparent framework within which the private sector could decide. Yet today, Boris Johnson sits at the opposite end of the spectrum.

Over the past decade, the Conservative Party has changed position on science, innovation and how we’ll hit net-zero, with the Prime Minister now (correctly) arguing that to achieve net-zero, the government must choose technologies and intervene in markets. But, to the discomfort of some of his MPs and cabinet colleagues, this change has also radically shifted the party’s position on the role of the state in the economy and innovation policy.

As economist Mariana Mazzucato notes, “innovation is political”. These tensions are not simply squabbles over funding levels but reflect decades-old divisions over the role of the state. Acknowledging that is crucial to understanding today’s cabinet splits.

The government now has a target to make the UK a “science superpower” and plans to use the power of the state to achieve it, with R&D investment targets and a high-risk, high-reward, innovation agency. This is something of a break with the orthodoxy established by the Thatcher government which backed away from funding any “near-market” innovation. Yet this new approach to research is absolutely necessary today to scale and adopt the clean tech needed tomorrow.

At the heart of the government’s net-zero strategy is the Prime Minister’s technology-specific “Ten Point Plan” which sets out support for business innovation and an active role for government in shaping markets.

This shift has not been easy for some. Johnson and Rishi Sunak don’t simply disagree on the spending needed to hit net-zero, they fundamentally clash on whether it’s even Westminster’s role to intervene.

The question of the role of government (big versus small; hands-on versus hands-off) is now fraught for the Conservative Party. During his spending review speech, Sunak boosted science investment but made the plaintive cry: “Do we want to live in a country where the response to every question is, ‘What is the government going to do about it?’”

Thatcher, an industrial scientist herself, would recognise this divide. Science historian Jon Agar notes that R&D was an early experiment in the development of her free-market philosophy – “If markets could work for science policy, they could work anywhere.”

Johnson backing Business Secretary Kwasi Kwarteng over the steel sector is not about a single bailout, it’s a question of the role of government. Kwarteng, himself an author of the free market Britannia Unchained, has shifted positions, stating that “there’s nothing [better] to convert someone from being a radical free marketeer to seeing the virtues of government action than making them an energy minister”.

Sajid Javid’s position on this issue is unclear, yet his short tenure as “Thatcherite” business secretary was noted for the severity and destructiveness of the cuts to science budgets and institutions. Today, Javid is responsible for one of the largest public market interventions of all: the NHS.

The need to transform our economy to achieve net-zero by 2050 is urgent. The government’s ambition on this is clear. Yet cabinet tensions on the role of the state remain barriers to accomplishing this. Only through understanding the half-century history of the Conservative Party’s shifting position on the role of the state in innovation can we unpick the political tensions that need to be resolved today.

Dr George Dibb is Head of the Centre for Economic Justice at IPPR.

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