“I’m from the government and I’m here to help.”
Ronald Reagan said these were the nine most terrifying words in the English language.
It was a joke, but for a quarter of a century British ministers took Reagan’s quip seriously.
Successive Conservative administrations subscribed to the philosophy that the Government’s economic responsibility was limited to controlling public spending and cutting taxes.
For Labour, the only real difference was that it favoured more redistribution.
Blues and reds both agreed that when it came to business the job of government was to get out of the way. This was said to be the painful lesson of the interventionist 1970s and fiascos like the nationalisation of British Leyland.
Yet with yesterday’s Green Paper – “Building our Industrial Strategy” – it feels like those ideological blinkers have finally been lifted.
The British aversion to innovation was always a misreading of history; the errors of 1970s intervention were in lavishing help on particular firms and throwing good money after bad.
Smart state support for important sectors – aerospace, life sciences, automotive, creative industries – in the form of co-funding for research centres rather than individual companies, as outlined in the proposals, really ought to be uncontroversial.
It’s a genuine relief that they recognise the success of such intelligently targeted interventions in South Korea, Germany and, yes, Reagan’s US.
Indeed, for all the fanfare around this document, a sectoral support strategy is actually a continuation of the Coalition approach (which itself picked up on the sensible things Peter Mandelson was doing in the final years of the last Labour government).
The wider orientation is sound too.
The Government is right to focus on beefing up the support for university spin-off technologies, leveraging our large university science base. It’s pretty clear that not enough has been done here – and it’s welcome that the Green Paper faces up to this rather than trying to gloss over it.
The Green Paper is also right to identify relatively weak levels of numeracy and literacy among young people as a critical problem holding back UK productivity.
The emphasis on skills, rather than the numbers going through university, is overdue.
The Government is also correct to recognise our historic public under-investment in transport and energy infrastructure.
The general tone of the document is one of humility and a willingness to learn from the example of other countries rather than the sort of brainless Union Flag-waving we’ve had far too much of in recent months.
The problem is not, despite what the free market fundamentalists say, a lurch back to the 1970s but that ministers aren’t going far enough.
An industrial strategy on the cheap is a false economy.
The Autumn Statement’s public infrastructure boost was pretty meagre.
These proposals pay lip-service to the growing need to give people the opportunity to train and retrain throughout their working lives. Yet a big part of the problem here is funding.
Largely thanks to the Treasury’s prejudices, adult education has never been funded properly and there is no sign of a fundamental change on that.
Bank lending for promising small firms remains a critical problem. A government truly determined to address this would be looking at breaking up RBS into a network of German-style state-owned business banks.
But it’s not just about money.
There would be a stronger approach to corporate governance.
We need a sea change in corporate attitudes to investment and worker training from large firms. Putting workers on the boards of public companies could have been a catalyst for such a shift if Theresa May hadn’t backed down.
Competition policy is not mentioned in the document.
The Government ought to mandate the split of Openreach – the regulated BT division that is under-investing in our broadband infrastructure – from its parent company without delay.
And it is hard to take a government that complains about the UK’s productivity gap seriously if it refuses to intervene to sort out the productivity-destroying disaster that is Southern Rail.
There are other lacunae.
There is little emphasis on the massive productivity gap between firms and within regions, something the Bank of England chief economist Andy Haldane recently highlighted.
Why don’t the laggards learn from the best? And how can the state facilitate that learning?
It would be fatuous to suggest that there is a simple answer to this but the gains from making progress on this front could be vast.
Nor does the document engage with the biggest single threat to businesses and national productivity since perhaps the Second World War: Britain leaving the European Union.
On the menu of reasonable ideas to boost Britain’s productivity and rebalance the economy, Brexit is nowhere to be found.
There is not a single proposal –with the debatable exception of reforming public procurement rules –that could not have been actioned at any time over the past four decades during which Britain has been a member of the European Union.
Indeed, Brexit threatens to pull the Government towards the worst sort of counterproductive industrial strategy.
Desperate corporatist deals, like the one the Prime Minister struck with Nissan to keep the Japanese firm in Sunderland, really do hint at an unwelcome return to the failures of the 1970s – especially if other large companies start demanding their own special agreements.
Then there are incoming curbs on immigration and the general pandering to xenophobic sentiment which threatens serious harm to our cosmopolitan university sector.
We also face the possibility of a panicked Government doubling down on the regressive policies of the past three decades: deregulation of the banks to compensate for their loss of their single market passport; drastic cuts in corporation tax to offset the pain of new customs checks for exporters.
None of this will help industry, or productivity, or regional rebalancing.
The terrible truth is that the first line of any truly rational industrial strategy would echo the 2015 Conservative manifesto: “We say yes to the single market”.