UK industrial strategy launch pushed back to end of June

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The launch of Britain’s long-awaited industrial strategy has been pushed back to the end of June, as pressure mounts on ministers to come up with an ambitious plan to cut the country’s punishing industrial energy costs.

The strategy, originally slated to be launched in the spring, has been held up as ministers hold last-minute negotiations with the Treasury over departmental budgets, ahead of the spending review on Wednesday.

“Everything is dependent on the spending review,” said one person working on the industrial strategy, which is prioritising eight “growth” sectors. “There are a lot of square brackets in the text. Anyone could have predicted this would happen.”

Government officials said the plan would now be launched in the last week of June and admitted that last-minute haggling over Whitehall budgets had held it up.

But one ally of Jonathan Reynolds, business secretary, said work was almost complete and there was a desire to ensure the strategy had a good slot in the “grid” of government announcements, to ensure maximum attention.

In a big month for Prime Minister Sir Keir Starmer’s economic policy, chancellor Rachel Reeves will announce the conclusions of her spending review — covering the rest of the parliament — on June 11.

A long-term infrastructure plan is set to be announced the following week, accompanied by announcements of specific projects. The industrial strategy and a separate trade strategy will be launched in the week starting June 23.

The industrial strategy will include plans for advanced manufacturing, clean energy, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.

It will also address two of the big issues that affect the whole economy: high energy costs and skills shortages. Industry bosses want major investment in both areas.

The cross-party House of Commons business and trade committee on Friday urged ministers to “level the playing field” on energy costs with competitor nations. 

Rachel Reeves told an audience at the annual dinner of the CBI lobby group on Thursday: “We know that one of the questions is how we make energy more affordable, especially for a lot of our intensive energy-using businesses where the price compared with other countries around the world is just too acute to be competitive.”

“That is a question that we know we need to answer in the industrial strategy in a few weeks,” the chancellor added.

Industry chiefs briefed on government thinking are worried that ministers might focus help on a few hundred companies engaged in energy-intensive sectors such as steel and ceramics and say they want the help spread much more widely to other companies.

The committee also called for improved public procurement, new measures to help businesses access scale-up funding and the devolution of powers over post-16 technical education and training to elected mayors.

Liam Byrne, Labour MP and committee chair, said: “In a splintering global order we are home to world-leading science and technology, a bastion of political stability, a creative leader that plays by the rules and one of the world’s greatest financial centres. In the new world that is taking shape, we hold a lot of aces.” 

But he cautioned that such a position needed to be reinforced by “a remaking of the British state for a new economic era”. 

Stephen Phipson, chief executive of manufacturing lobby group Make UK, said: “This report is further evidence of the hard realities facing British industry — sky-high energy costs, an inability to access talent and untapped investments from a lack of access to finance.”

The Department for Business and Trade said it was determined to create “the best possible conditions for the private sector to thrive” and had “consulted extensively with hundreds of businesses” around the industrial strategy.