{"id":208504,"date":"2025-06-23T20:05:09","date_gmt":"2025-06-23T20:05:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/208504\/"},"modified":"2025-06-23T20:05:09","modified_gmt":"2025-06-23T20:05:09","slug":"was-labours-industrial-strategy-worth-the-wait","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/208504\/","title":{"rendered":"Was Labour\u2019s industrial strategy worth the wait?"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

The UK government has declared its industrial strategy<\/a> \u201ccritical\u201d to its overall growth mission. <\/p>\n

In the long-awaited, and delayed, plan, Sir Keir Starmer\u2019s administration has thrown its weight behind eight sectors that it expects to deliver faster growth and higher pay for British workers. <\/p>\n

The main focus of the strategy<\/a> focuses on cutting Britain\u2019s burdensome electricity prices for manufacturers. However, energy-intensive businesses must go through a two-year consultation period to determine whether they are eligible for new subsidies. Even then prices will still probably remain higher than in Europe. <\/p>\n

What\u2019s in the industrial strategy?<\/p>\n

This 10-year plan attempts to tackle obstacles facing eight strategic sectors as companies try to scale up. The so-called \u201cIS-8\u201d are: advanced manufacturing; creative industries; clean energy; digital technologies; professional and business services; life sciences; financial services; and defence. <\/p>\n

Alongside tackling high electricity prices there are plans to make it easier for companies to recruit, train and attract skilled workers through tweaks to the apprenticeship levy and visa schemes. It also ringfences \u00a34bn of capital from the British Business Bank, a state-owned development bank, for industrial strategy sectors.<\/p>\n

The bank will be able to make direct investments of up to a maximum of \u00a360mn, up from \u00a315mn currently, for the scale-up of businesses. <\/p>\n

What does it leave out?<\/p>\n

Aside from the promise of future savings for energy-intensive industries, there appears to be no new government money to match the ambition. There is also no support for companies outside of the chosen eight sectors.<\/p>\n

Some critics have argued that the government should focus on the wider economy, particularly on retail and hospitality businesses that have been hit hard by tax reforms. <\/p>\n

There is nothing in the way of support for energy costs or business rates reform, which had initially been promised in Labour\u2019s manifesto, in the strategy. Some nationally important industries, such as the food sector, are questioning whether they are eligible to access the new funding and support mechanisms. <\/p>\n

Does it tackle the skills shortage in critical industries? <\/p>\n

Amid growing fears about a drop in workforce productivity, economic inactivity and a reliance on foreign workers, the government plans to spend \u00a31.2bn a year on \u201cskills\u201d by 2028-29. The skills reform includes widening access to the apprenticeship levy and introducing more short courses within the eight sectors. <\/p>\n

There is a recognition that the UK needs to attract talent from overseas and the strategy will widen access to skilled worker visas to include welders \u2014 who are critical in both clean energy and defence industries \u2014 laboratory staff, computer-aided designers, engineering technicians and data analysts. <\/p>\n

To help industries navigate government processes, a concierge service will be set up, alongside a \u00a354mn fund for attracting \u201cthe brightest minds\u201d to the UK. <\/p>\n

How much of it is new?<\/p>\n

Some of the initiatives highlighted are not new. For example, the strategy rehashes an old pledge to spend \u201cat least 10 per cent of the Ministry of Defence\u2019s equipment procurement on novel technologies\u201d.<\/p>\n

The strategy instead shifts cash towards the eight strategic sectors while diverting it from other industries deemed to be insufficiently cutting edge.<\/p>\n

Recommended<\/p>\n

\"UK<\/a><\/p>\n

Several existing government institutions will be given a mandate to deploy more money towards the IS-8, including the National Wealth Fund, UK Export Finance and UK Research and Innovation. The \u00a34bn of BBB funding is carved out of a previously announced \u00a325.6bn increase in financial capacity. <\/p>\n

Among the other new elements is a review of Britain\u2019s National Security and Investment Act to ensure that the legislation is \u201ctargeted and proportionate\u201d. There will also be a rebranding of freeports and investment zones under the umbrella of \u201cIndustrial Strategy Zones\u201d. <\/p>\n

Which technologies will the UK be focusing on?<\/p>\n

The strategy has bold ambitions for the UK to become a technology leader in electric cars, defence and artificial intelligence with a promise to \u201ccreate the first European market for self-driving vehicles and services\u201d. <\/p>\n

The government will increase research and development funding to \u00a322.6bn by the end of the decade from \u00a320.4bn, with more than \u00a32bn for AI and \u00a32.8bn for advanced manufacturing over the next five years. <\/p>\n

How has it been received? <\/p>\n

The 160-page document includes several new initiatives but also repurposed many existing spending commitments.<\/p>\n

Businesses, under fresh pressure from rising geopolitical risks and US tariff costs, welcomed the support but also expressed some disappointment that much of the funding had been announced earlier. Some groups expressed concern that many details appeared still to be missing.<\/p>\n

Adrian Musgrave, head of sales at Bridgnorth Aluminium, the only aluminium coil producer in the UK, which currently pays \u00a31 million a month in energy costs, said: \u201cLike with all business support, companies would prefer it to be implemented immediately, so the fact that there is going to be further consultation on some \u2018energy-related\u2019 elements of the strategy is a little frustrating.<\/p>\n

\u201cWe are still digesting the text and what it really means. For example, the \u2018British Industrial Competitiveness Scheme\u2019 needs more explanation, though it initially sounds very encouraging. In short, we look forward to hearing more and exploring the details.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":208505,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-208504","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114734479879550096","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/208504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=208504"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/208504\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/208505"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=208504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=208504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=208504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}