Government proposes Industrial Strategy to 'back Britain for the long-term'
Prime Minister Theresa May has vowed to "keep costs down for businesses" as she today (23 January) unveiled the Government's plans to deliver a wide-ranging Industrial Strategy, which will seek to to maximise the economic potential of a low-carbon transition.
May used her first regional Cabinet meeting in the northwest this afternoon to unveil the highly-anticipated Industrial Strategy green paper, which places a heavy focus on research and development (R&D) to future-proof the country's organisations and cities.
The green paper is essentially a consultation document before the Strategy is introduced, with the Government now welcoming the input of "anyone with an interest" in the plans to put their point of view across through an online survey.
“The Modern Industrial Strategy will back Britain for the long-term: creating the conditions where successful businesses can emerge and grow, and backing them to invest in the long-term future of our country," May said.
“It will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success.”
Innovation and growth
The paper includes proposals to form a long-term roadmap to minimise business energy costs – to be set out in 2017 – and to develop a new research institution that would help to commercialise energy storage technologies.
Alongside promised 'sector deals’ that are shaped by the interests of firms across various major industries, the Industrial Strategy raises the prospect of stronger Government support and involvement to allow businesses to address regulatory barriers currently hindering innovation and growth.
Specifically, the paper sets out how the UK will foster innovation to effectively close the gap between the nation's most productive companies and sectors - with an emphasis on increasing exports – by opening funding and collaborative opportunities to accelerate the low-carbon transition.
It also details the establishment of a new Industrial Strategy Challenge Fund, which offers support for smart energy technologies, robotics and artificial intelligence (AI). May confirmed that the Fund forms part of the £4.7bn R&D pot announced in the Autumn Budget – the biggest increase by any Parliament since 1979.
The Industrial Strategy will seek to draw inspiration from the automotive and aerospace sectors; whereby individual firms grasp the initiative to shape sectors for the future. May also announced the first set of champions for sectors with strong growth potential, including former Ford chief technical officer Richard Parry-Jones - who is tasked with transitioning the transport sector to low-emission. Other champions include Siemens’ UK chief executive Juergen Maier; tasked with enhancing industrial digitalisation and former business secretary Lord Hutton who will oversee competitiveness in the nuclear industry.
The Strategy document specifically outlines 10 strategic pillars which will act as catalysts for successful implementation. Alongside developing world-class business skills and encouraging trade, the pillars note the need to “use strategic government procurement to drive innovation and enable the development of UK supply chains” and “secure the economic benefits of the transition to a low-carbon economy”, as listed below.
Commenting on the release of the new Strategy paper, Department for Business, Energy & Industrial Strategy (BEIS) Secretary Greg Clark said: “This is an important step in building a modern, dynamic industrial strategy that will improve living standards and drive economic growth across the whole country.
“A modern British Industrial Strategy must build on the UK’s strengths and extend excellence into the future; close the gap between the UK’s most productive companies, industries, places and people and the rest; and ensure we are one of the most competitive places in the world to start and grow a business.”
The paper alludes to the need to upgrade “standards of performance” across digital, energy, transport, water and flood defence infrastructures – all of which will be strengthened through a focus on regional priorities and ambitions.
Emissions Reduction Plan
The Government has already set the regional aspect of the Strategy into motion: as part of her visit to the North West today, May announced an extra £556m investment into the Northern Powerhouse scheme to create jobs and boost confidence for businesses. Critics have argued that the Northern Powerhouse agenda ignores the need for new energy infrastructure. While the new investment doesn’t go into specifics about what technologies will be mobilised in the North, the Government has injected £10m to the Greater Manchester and Cheshire Life Sciences Fund.
Following Defra’s affirmation that a new, five-year climate action plan, launched on 18 January, would give insurances to businesses and communities over protection from risks related to flooding, the new fund will boost flood resilience measures in Bradford, Calderdale, Craven, Kirklees and Leeds – safeguarding more than 1,300 businesses.
In what is regarded as a hugely significant day for the future of Britain's green economy, the Government has also confirmed that it will publish a long-awaited Emissions Reduction Plan later this year, which it insists will provide “long-term certainty” for investors. Additionally, a review of the low-carbon transition of the power and industrial sectors will examine the best route to support cost reductions in energy efficiency and offshore wind.
Matt Mace & George Ogleby