UK’s industrial strategy proposals set out growth agenda for next decade

The industrial strategy green paper (66-page/3.8MB PDF), titled Invest 2035, sets out eight growth-driving sectors that the government has identified and will focus on providing support to in the next 10 years. The paper has outlined the government’s approach focused on reducing barriers to growth in sectors and places with the highest growth potential and creating the conditions for increased investment across the UK.

It also aims to deliver the certainty and stability businesses need to invest in the UK by establishing a statutory, permanent and independent Industrial Strategy Advisory Council, so that “stability and long-termism” will be hardwired into its plan from the start.

Clare Barclay, CEO of Microsoft UK, has been appointed as the chair of the new council, which will inform the development of the strategy through its expertise and latest evidence, working with business, trade unions, devolved governments, local leaders, academia and stakeholders.

Scott Wright, a public policy expert at Pinsent Masons, described publication of the paper as a positive sign of intent by the UK government. “If delivered successfully, the strategy will create the conditions to facilitate investment and economic growth. Businesses now have an opportunity to shape the final version of the Industrial Strategy to be published in the 2025 Spring Spending Review,” he said.

According to the government’s proposed plans, the eight sectors earmarked for growth are: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.

In the next stage of developing the 10-year plan, the government said it will prioritise subsectors within these broad sectors that meet its objectives and where there is evidence that policy can address barriers to growth. Specific sector plans will be designed in partnership with business, local governments, regions, experts and other stakeholders. They will be published alongside the industrial strategy in spring 2025.

The government has also identified several policy areas that it sees as important for growth-driving sectors and creating a pro-business environment. These cross-cutting areas include people and skills, innovation, energy and infrastructure, regulatory environment, access to growth capital and scale-up finance, and international partnerships and trade. The paper says that addressing sector-specific and cross-cutting challenges together will underpin long-term growth and help overcome coordination issues that have hindered past strategies.

“The consultation is an opportunity for businesses to articulate why their sectors should receive focus, as well outlining existing barriers to growth that the new strategy may be able to address or remove. However, the success of the industrial strategy may be predicated upon the amount of funding provided for industrial policy by the UK government in the forthcoming budget,” said Wright.

The consultation on the industrial strategy green paper closes on 24 November.

The publication of the green paper coincided with the government’s inaugural Investment Summit, where it announced that it has secured £63 billion of private investment. This private sector investment will be supplemented by £27.8bn in public investment to be managed by the National Wealth Fund, which is delivered through the UK Infrastructure Bank. At the summit, it was also confirmed that corporation tax in the UK will be capped at 25%, the lowest in the G7, for the duration of the current parliament, while the Prime Minister Sir Keir Starmer promised to “upgrade the regulatory regime” and “rip out the bureaucracy that blocks investment”.