Theresa May’s reaction when she heard the IEA had criticised her new industrial strategy – or at least, a close approximation of how it may have appeared.

What’s this? The IEA – a major Tory think tank – turning on Theresa May because of her industrial strategy?

The Conservative family is at war, folks.

Still, you should expect this kind of behaviour from free-marketeers like the mob at the Institute.

They believe that the role of government is to stay out of business in every respect other than making sure that nothing gets in the way of profit – see the, frankly barking, list of demands below, most of which would kill the UK economy stone dead, as matters stand at the moment.

But they are right to criticise Theresa May. Her plan is equally mad, as This Site made clear yesterday (January 22).

I like Paul Mason’s reaction to this:

The United Kingdom needs leadership, not gimmicks. But gimmicks are all these clowns have got.

While political pressures mean that the revival of interest in industrial strategy is understandable, it is not clear that the sectorally-based policies being suggested are fundamentally different from those proposed in the past.

Governments are still likely to be tempted to intervene for narrowly political motives and it is still assumed that governments possess insights which the private sector is denied.

The UK’s economy and its population would be better supported by a revival of ‘horizontal’ rather than ‘sectoral’ strategy, concentrating on boosting competition, relaxing planning controls, liberalising energy, deregulating markets and promoting tax reform. The government should also eschew protectionism and excessive restrictions on immigration.

Source: Balancing the economy: The hand of government or the invisible hand? – Institute of Economic Affairs

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