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THE NEXT MOVE FOR MANUFACTURING: WHAT WILL THE INDUSTRIAL STRATEGY MEAN FOR THE
SECTOR?

Posted on 2 Dec 2024 by The Manufacturer
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Listen to this article
13 min


Following the launch of the Labour government’s new, highly-anticipated
Industrial Strategy, The Manufacturer Editor, Joe Bush, quizzed Minister of
State for Industry, Sarah Jones, on its likely impact on UK manufacturing.

The government has stated that the new Industrial Strategy ‘will drive long-term
growth in key sectors that is sustainable, resilient and distributed across the
country’. It will be focused on eight ‘growth-driving sectors’: advanced
manufacturing; clean energy industries; creative industries; defence; digital
and technologies; financial services; life sciences; and professional and
business services.

A green paper has been published to kick-start delivery of the strategy with
businesses up and down the country invited to respond. Stakeholders will also be
provided with the opportunity to inform the strategy’s continued development and
ensure it delivers tangible impact to people and communities right across the
UK.

Listen to this article
13 min


“A key challenge for all sectors in recent years has been the instability at the
top level of government which has meant it’s been difficult to know where the
next policy is coming from and where the direction of travel is heading.“





It has also been announced that a new supply chains taskforce will work to
assess where supply chains critical to the UK’s economic security and resilience
could be vulnerable to disruption. The taskforce will ensure that government
works with business to address these risks, building the conditions required to
deliver secure growth.

In addition, Clare Barclay, CEO of Microsoft UK, will chair the Industrial
Strategy Advisory Council, which will inform the development of the Industrial
Strategy through its expertise and latest evidence, working with business, trade
unions, devolved governments, local leaders, academia and stakeholders.

We caught up with Minister of State for Industry, Sarah Jones, to find out more.


WHAT DOES THE CURRENT LANDSCAPE OF UK MANUFACTURING LOOK LIKE?

SJ: There’s a huge amount we can be proud of in terms of what we do in this
country, the talent that we’ve got and the added value that manufacturing brings
in terms of productivity and R&D. That’s why it’s at the heart of our Industrial
Strategy.

Of course, there are challenges that we need to overcome to make sure we can
grow the sector – whether it’s skills, energy costs or access to markets, there
is a huge amount we as a government can be doing to provide support.

We’re all on an important journey when it comes to the transition to net zero,
and we need to make sure as government, we’re trying to make that transition as
smooth as possible.

Skills is an issue that comes up time and again and it’s deeply frustrating that
it’s been quite some time since we’ve had a national strategy around this vital
topic. That’s why we’ve put some basic infrastructure in place, such as setting
up Skills England (a new body that will bring together key partners to meet the
skills needs of the next decade).

--------------------------------------------------------------------------------

The minister visiting New Holland, a manufacturer of construction and
agricultural machinery

--------------------------------------------------------------------------------

This will provide a national view of where shortages are, where’s the movement
of people, where do we need training, what does that mean for apprenticeships
and FE colleges, and for the funding and the resources that we’re putting into
higher and further education.

A key challenge for all sectors in recent years has, of course, been the
instability at the top level of government. There’s been a lot of chopping and
changing and since Brexit, we’ve seen a number of PMs, Chancellors and other
ministers. That has meant it’s been difficult to know where the next policy is
coming from and where the direction of travel is heading.


WHAT DOES THE SECTOR NEED IN ORDER TO NAVIGATE THESE CHALLENGES AND THRIVE?

Manufacturing isn’t a one-size-fits-all sector so providing certainty and
stability is really important as it will help navigate the direction of policy.
The Industrial Strategy is the backbone of that and will enable an understanding
of the sectors where we know we can grow and build in the UK, and the areas of
the country that represent the biggest opportunities.

Obviously, we’ve not been in power for that long, but we have already set up
some of the architecture in terms of publishing the green paper on the
Industrial Strategy, announcing the Industrial Strategy Advisory Council and
making sure the levers are in place that will help create the climate where
businesses can thrive and industry can grow.

Listen to this article
13 min


“In the run up to the election a lot of businesses asked us why they would
invest in the UK when other nations were offering better and clearer options?
The Industrial Strategy provides us with the infrastructure that businesses can
understand and lock into.”

As part of the Industrial Strategy, we have the eight sectors where we think
there is huge potential for growth and where there is already strength. We can
build on those at pace. Advanced manufacturing is one of those key focus areas;
within aerospace and automotive, for example, we’ve seen the development of
funding in the past to help with R&D, pre-production and to move those sectors
forward. We want to build on that and make sure we continue to be world leading.

And, in terms of the wider manufacturing base, because of the global situation
and geopolitical uncertainties that currently exist, there are some foundational
industries that will also need to be made secure.


CAN YOU EXPLAIN THE KEY ELEMENTS OF THE INDUSTRIAL STRATEGY AND HOW IT DIFFERS
FROM WHAT HAS GONE BEFORE?

The last attempt at an Industrial Strategy was in 2017 but it didn’t take off.
Despite good intent it never really had the government backing it needed. The
major changes we saw at national level during that time would have been a huge
challenge for any Industrial Strategy, and this is where we hope ours will be
completely different.

The large majority we have in Parliament will enable us to predict the next few
years in terms of who’s going to be running the country, so we can set an
Industrial Strategy which has a clear five to ten year plan. Its longevity is a
key differentiator to what has gone before.

We also want it to be as cross-party as possible and to span government. As a
former civil servant, I’m not naive to the challenges of large government
departments, and how difficult it can sometimes be to get them to work together.
However, the whole design of the Industrial Strategy is based around departments
collaborating on the challenges that currently exist.

Although the Industrial Strategy sits within the Department of Business and
Trade, we are fully aware that we don’t have all the levers at our disposal to
deliver many of the changes we would like see. Issues such as skills or
regulation fall outside of the department’s remit so we will have to work across
government and this is something that’s really being driven by the Prime
Minister.

Another difference is we want this new strategy to be a genuine partnership with
business. I don’t want us to be making announcements that come as great
surprises to our partners. I want us to be iteratively coming up with solutions
and making sure we’re making the right decisions together; whether it’s with
industry, the trade unions or all the other structures around the country in
terms of local regions and governments.

So, there’s three parts to the strategy. One is the eight sectors that we’ve
identified. The second is a geographical element around identifying areas where
we know we can grow; if you look at manufacturing in the UK, there’s a clear
pattern of potential across the country. And then the third piece is how we, as
government, support industry and business. That’s where cross cutting issues
around skills, innovation, regulation, energy etc, which span all sectors, are
really crucial.

Although the Industrial Strategy is there to drive growth, that growth has a
purpose. We want people to be better off, have good jobs and more money in their
pocket. That’s why the Industrial Strategy doesn’t sit in isolation but
alongside all the work we’re doing to make work pay and the huge reforms that
we’re making to people’s rights at work. Because the more secure people are in
their jobs, the more productive they are, the better their relationship is with
their employers, and the more productive a company becomes.

--------------------------------------------------------------------------------

The minister on a manufacturing site visit to Ford

--------------------------------------------------------------------------------


HOW WILL THE INDUSTRIAL STRATEGY HELP ATTRACT NEW INVESTMENT INTO THE UK?

In opposition, we spent years talking to industry and business, and the need for
certainty and a plan was part of every single conversation. People felt like
they were swinging in the wind when it came to where policy was going. And so
providing that stability will be really important.

At the recent International Investment Summit, held on the same day the
Industrial Strategy’s green paper was published, people welcomed the sense of
clarity and consistency as something they could hang their investment on. If
you’ve decided to invest in a certain industry, you could take your money to a
variety of different countries, some of whom are ahead of the UK in certain
areas.

In the run up to the election a lot of businesses asked us why they would invest
in the UK when other nations were offering better and clearer options? The
Industrial Strategy provides us with the infrastructure that business can
understand and lock into. I also believe we’re going to be more sophisticated
around things like innovation and supply chains, which will give us a proper
picture of what the country is doing and where we want to get to.


WHAT NEEDS TO HAPPEN TO ENSURE SUCCESSFUL DELIVERY?

Of course, this is just the beginning. We’ve published the green paper, and we
really want people to respond to that. We will be having a series of engagements
and all of the ministers involved will be talking to as many people as they can.

We will publish the Industrial Strategy itself in the spring. And again, that
will be the start of the Industrial Strategy Advisory Council holding our feet
to the fire and making sure that we’re being evidence-based, and pushing in the
right direction which will provide the accountability to the strategy’s
structure. There will then be a network of bodies that sit underneath the
council that feed into different sectors to make sure we’re keeping the momentum
going and not running out of steam.


WHAT DOES THE NEW INDUSTRIAL STRATEGY OFFER TO SMES?

SMEs are at the heart of the UK and in my own constituency in Croydon, it’s
small businesses that drive the whole town, and are incredibly important. The
general work within the Industrial Strategy around innovation, energy and skills
will all support small businesses.

When I talk to SMEs, they all stress the need to come up to speed in terms of
digital and AI, to reduce energy costs and to go through a transition in a way
that works for them. Therefore, the government needs to be as pro-SME as
possible.

That’s why we’re also committed to a Small Business Plan, separate to the
Industrial Strategy. We have a Minister for Services, Small Businesses and
Exports, Gareth Thomas, and it’s one of the four priorities for Johnny Reynolds,
the Secretary of State for Business and Trade. So whether it’s skills, energy
planning or procurement, there will be a plan for small businesses.


CAN YOU EXPLAIN THE ROLE AND FUNCTION OF THE NEW SUPPLY CHAINS TASKFORCE?

We live in a very different world, and we need to make sure we’re as secure as
we can be, and that we’re supporting business and industry as much as we can.
Supply chains is an issue that comes up regularly, and something we need to
focus on.

My colleague, Douglas Alexander, is leading this work, looking at supply chains
and where our dependencies and vulnerabilities are globally, how we can mitigate
those, where our sourcing options are and what we can be building here in the
UK.

For example, our commitment to invest £2.5bn in UK steel, on top of the £500m
that went to Port Talbot. In part, this is about securing some of the supply for
our steel here in this country. We believe this would be a good thing for lots
of reasons, not just for jobs and skills, but also security. So, this piece of
work will develop and there will be a task force, membership and a strategy that
will form a really important piece in the jigsaw.


CAN YOU EXPLAIN THE ROLE OF THE INDUSTRIAL STRATEGY ADVISORY COUNCIL?

The council will inform the development of the Industrial Strategy through its
expertise and evidence, working with business, trade unions, devolved
governments, local leaders, academia and stakeholders.

This council will have a statutory function, in a similar way to bodies such as
the Climate Change Committee. This is important as it will enable the council to
hold the government to account, look at the evidence and make sure we’re going
in the right direction.

Claire Barclay, President, Enterprise & Industry, EMEA at Microsoft, will chair
the council and we will announce, as we travel along the process, who else is
going to be onboard. The idea is to help stabilise the whole strategy and remove
any political instability. It will monitor, advise and hold the government
accountable on delivery.


THERE HAS BEEN AN ONGOING CAMPAIGN FOR A DEDICATED MINISTER FOR MANUFACTURING –
WILL THE SECTOR GET ITS WISH?

When I look at what I’m doing, I feel like I am a dedicated minister for
manufacturing. However, there is a whole range of ministers who will be working
within their briefs to try and support the manufacturing sector.

It’s for the Prime Minister to decide what he wants in terms of titles and
positions. However, it’s clear the amount of value that manufacturing brings to
the UK and the huge potential it has.

When you look at the Industrial Strategy, with advanced manufacturing right up
there as one of the growth-driving sectors – plus the added support
manufacturing will receive via the cross cutting policies we’ll introduce – it’s
certainly something we’re going to be focused on, whether it’s in our job title
or not.

Listen to this article
13 min


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