Keir Starmer has said that economic growth is the Government’s top priority. Crucial to delivering this is the production of an Industrial Strategy.
Labour published a 24-page document last autumn setting out the bones of its industrial strategy, and this is now being worked on in government. Reports suggest that some initial thinking will be available at the Government’s investment summit in October, with the final product targeted for nine months time, so around next May.
Industrial Strategy (IS) can be used to describe many different types of initiative and UK industrial strategies have had a mixed track record. In the past UK critics have argued that government picking industrial winners in practice means losers picking government, and although governments of both parties have had industrial strategies, there has sometimes been a defensive tone to these initiatives in the face of accusations of interference in the market.
More recently industrial policy has been back in lights around the world, notably in the US under President Biden but also in various EU initiatives. Many business people have called for a clearer sense from government of its priorities for supporting business sectors.
What might Labour’s approach contain?
Last year’s publication was unusual in its breadth and explicit linkage between industrial and wider policies. Many people will be familiar with the arguments for investing to decarbonise our energy. However, they might be surprised that another of the four “missions” underpinning the strategy is ensuring high quality care for all, including skilled carers as well as more preventative treatments.
The four missions are: clean power by 2030; caring for the future; harnessing data for public good; and building a resilient economy.
The document stresses that partnership with business and trade unions will be at the core of the strategy. Recognising that its business audience will be looking for a clearer account of what the Government’s interventions might actually be, the document also sets out four ways in which Labour will relate to different types of business sector:
- Sovereign capabilities, such as critical infrastructure, which require a unique partnership with government to keep the UK safe and secure, involving public-private partnerships. Green steel is one example. British ownership is a consideration in ensuring security.
- Global champions: those sectors which are the envy of the world, in other words globally competitive, where government needs to provide the right, stable environment.
- Future successes: new sectors or industries, where groundwork support for innovation is needed.
- Everyday economy: these are the sectors employing most people, where government needs to help productivity improvement, including by strengthening labour rights but also enabling take up of data and digital applications.
The document also commits the Government to establish an IS Council on a statutory footing, whose role will be to refine the success measures for the headline missions and evaluate progress towards them.
The sheer breadth of the scope covered in the document means that there is a lot to play for in defining priorities and choices. The document makes clear that the fact that a sector is namechecked does not mean that every company or every possible sector related to a mission will be treated alike. Choices will have to be made, and there will be objectives in tension between different stakeholders, as we are already seeing in the areas of employment rights and taxation.
Looking ahead
Although the pre-election document is not an official government white paper, it will be worth looking at how decisions over the coming months, even ahead of the strategy, chime with its principles. For instance:
- at the forthcoming Budget, which will be looking not just at taxes but at spending too;
- at regulatory decisions on issues such as employment law;
- at the interactions between government and economic regulators such as energy or competition;
- the approach to simplifying trade with the EU;
- and to decisions affecting individual companies such as Tata Steel or potential inward investors.
Even if these decisions don’t directly affect your business, they will give an indication of the extent to which the Government is prepared to listen to business, how far it will intervene in the market, and where it believes public investment adds most value. These decisions, as much as words written in a document, will show the reality of the Government’s industrial strategy.
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Looking for insights and support on how UK trade policy will impact your business in the near-term? At Pagefield, we understand there are many challenges – and opportunities – for businesses looking to thrive on the global stage, and we will be monitoring Labour’s developments in this area as they occur. If you want to talk to us about how we can help you to engage with international markets to achieve your strategic aims, please get in touch at hello@pagefield.co.uk
