May holds first industrial strategy meeting as construction falls after Brexit

UK Prime Minister Theresa May attempted to move into traditional Labour policy territory on Tuesday by unveiling an industrial strategy to boost productivity and wages.

May held the first meeting of the Cabinet Committee on Economic and Industrial Strategy at Downing Street on the same day that the UK’s construction industry recorded its fastest fall since June 2009 as the sector came under pressure from economic uncertainty prompted by Britain’s vote to leave the EU.

The Markit/CIPS construction purchasing managers’ index was 45.9 in July, down slightly from 46 in June but above economists’ expectations of 44. A reading above 50 indicates growth.

May's plan to to drive growth "up and down the country – from rural areas to our great cities” was seen as a rejection of ex-chancellor George Osborne's economic strategy, which was criticised for failing to focus on productivity and his “Northern Powerhouse” project, which focused on cities in the north of England.

“That is why we need a proper industrial strategy that focuses on improving productivity, rewarding hard-working people with higher wages and creating more opportunities for young people so that, whatever their background, they go as far as their talents will take them," May said in remarks released ahead of the meeting.

“If we are to take advantages of the opportunities presented by Brexit, we need to have our whole economy firing. That’s why this Committee’s work is of the highest priority, and we will be getting down to work immediately.”

However, May is already under fire over after postponing approval of the Hinkley Point nuclear plant amid security concerns over Chinese involvement. China warned that the “golden era” of relations with Britain is now in jeopardy.

A commentary published by the Xinhua news agency delivered a clear message about the repercussions to the UK of any delay.

"[It] not only draws queries from the international community about its [the UK’s] openness towards foreign investment, but also adds uncertainties to the ‘Golden Era’ of China-UK ties," the commentary said.

"The British new government is actually running the risk of dampening the hard-won mutual trust with China."