May's Plan to Get Economy `Firing' Is Flawed, U.K. Lawmakers Say

(Bloomberg) -- Prime Minister Theresa May's plan to “get Britain firing on all cylinders” lacks a clear long-term strategy and risks failing to spread prosperity, according to a cross-party panel of lawmakers.

The industrial strategy, announced in January, needs more clarity on steps to intervene in foreign takeovers, Parliament's Business, Energy and Industrial Strategy Committee said in a statement Friday, referring to Kraft Heinz Co.'s aborted bid for Unilever Plc. The panel called for a clear target for spending on research and development, a greater emphasis on improving skills and an overhaul of taxes on commercial properties known as business rates.

The strategy is a key plank of May's domestic agenda as she tries to ensure her government is defined by more than just Brexit. She touted her ambition for “a proper industrial strategy to get the whole economy firing” when she stood for the Tory leadership last year, and has repeatedly emphasized her goal of spreading prosperity to regions beyond London.

“The government must be bold, ambitious and visionary in developing their industrial strategy to ensure the sectoral and regional balancing to which it rightly aspires is achieved,” said Committee Chairman Iain Wright. The current “silo-based approach” in government means the plan “will not achieve the step change the prime minister aspires.”

Targeted Missions

The panel welcomed May's aims and change in approach, while warning that the strategy, which is now subject to public consultation, “consists of a long list of policy interventions, but lacks a framework for future decision-making.” 

Lawmakers also said:

• The government should spell out the circumstances in which it would intervene in foreign takeovers
• Where taxpayer money has supported research in a firm, the government should ensure it has the power to retain intellectual property in the event of a foreign takeover
• The government should increase public and private spending on research and development to 3 percent of economic output
• Ministers should promote high-skilled migration to the U.K.
• May should spell out how Brexit discussions will affect her industrial strategy

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Andrew Atkinson, Flavia Krause-Jackson