The Labour Government published a green paper – a consultation document – about its planned industrial policy at the Investment Summit on 14 October 2024. It plans to publish the final strategy in Spring 2025. What can we take from this document and what should we be looking for in the final strategy?
First, it’s worth reminding ourselves that the Labour Party published an industrial strategy document before the election, on which I wrote a blog earlier this year. The new document has a rather different approach, whilst retaining some of the same features. To that extent it’s an interesting signal of how Labour is transitioning from a party of Opposition to Government.
This green paper has a more practical approach which I expect business will find easier to get to grips with. Much of the document is focussed on identifying and describing eight “growth sectors” which the Government is placing at the heart of the strategy. These are:
- Advanced manufacturing
- Clean energy industries
- Creative industries
- Defence
- Digital and technologies
- Financial services
- Life sciences
- Professional and business services
In addition, the document covers so called “cross cutting policies”, which affect all sectors of the economy such as skills, competition policy and regulation, trade and international partnerships, innovation and infrastructure. The document sets out four principles affecting work in these areas:
- Building long term stability
- Renewing commitment to free and fair trade
- Easing the investor journey
- Being a strategic, growth focussed state
Many of these are familiar and could have featured in previous iterations of the strategy. However, the focus on the “strategic state” has a new emphasis, which reflects the Government’s broader policy approach. What it might mean in practice is not explained in much detail in the document, other than to promise that the Government will use the power of the state strategically to support and shape the UK’s growth. Stakeholders will want to consider how this could work for their sector or interest.
The Government has opened a consultation to inform the development of its new Industrial Strategy, and is asking interested parties to respond by 24th November 2024. Anyone who would like to input to the 32 specific questions asked in the green paper would be well advised to do so by this date.
The document explains the rationale for the selection of the sectors above, based on economic data on productivity, export performance and the best potential for further growth. The sectors are meant to include areas of existing strength (such as financial services or life sciences), but also areas of emerging potential (new technology). The Government recognises that the sectors described above are extremely broad and is looking to identify subsectors within them, crucially where policy can make a difference to the growth barriers they face.
Other important economic dimensions will be addressed, such as regional impacts and opportunities, and the benefits of clusters.
The Government also sets out its approach to working in partnership with business and other stakeholders such as trade unions, Devolved Governments and Mayoral Councils. It is setting up an advisory Industrial Strategy Council, chaired by Clare Barclay, CEO of Microsoft UK, to help steer the strategy’s development.
Whilst the document is somewhat more focused than the earlier Labour Party paper, it will be evident from this brief summary that there is a lot to play for in terms of the precise priorities the Government might adopt and the actions flowing from them. Strategies should set medium to long term measurable objectives; describe how these objectives are going to be achieved, in ways which are more or less under the control of those responsible for the strategy; and give some idea of timing. The extent to which it does this will be a good test of the value of the strategy. In the meantime, I would urge UK businesses and other stakeholders to engage with the process.