Newington's Elizabeth Culwick examines the Government's Industrial Strategy and what it could mean for businesses 

Business leaders periodically take stock to identify particular strengths and weaknesses within the company, detect any external threats, and implement measures to future-proof their company against any expected large scale shifts in the environment in which they operate. Over the past fortnight Theresa May has completed a similar process. She has finally broken away from her standard line of “Brexit means Brexit” to offer a glimpse of what a post-Brexit Britain could look like and, through the launch of her Industrial Strategy, outlined the steps that she will take to seek to protect the UK economy from the inevitable changes that lie ahead.

The Industrial Strategy seeks to bolster the UK economy by building on its perceived strengths and working with local government to ensure that prosperity and growth potential is experienced across the whole of the UK. At the core of the Industrial Strategy are 10 pillars that the Government believe will stimulate productivity across the economy. These range from developing skills or investing in science and research to encouraging trade and inward investment.

Secretary of State for Business, Energy and Industrial Strategy, Greg Clark’s foreword stressed the importance of free markets, a sentiment that is echoed throughout the document. Instead the strategy suggests that, although the Government will be taking a more interventionist approach than the preceding Government, it will act to ensure that the right conditions for growth – skills, good connections and R&D – are present across the UK, rather than provide monetary handouts to companies or specific sectors.

Although the Government is keen to not prop up industries with subsidies, this strategy sets out five sectors that will receive special support, in the form of investment in training and skills or deregulation. These “sector deals” for life sciences, low-emission vehicles, industrial digitalisation, nuclear and creative industries target areas that the Government believes have potential to grow. Other industries are invited to pitch for one of these “sector deals” by demonstrating to government how they could “transform their strategic prospects” and exactly where the Government could step in to help.

The consultation period for this Industrial Strategy closes on 17 April, after the March Budget. If this Industrial Strategy sets the tone for this Parliament, it is highly likely that this cautious approach to funding will be reflected in the Chancellor’s statement with no further announcements on domestic industrial policy. It remains to be seen what will be announced in the Budget, but it is likely that the Government will wait until after the Industrial Strategy consultation period has closed before making any further decisions on “sector deals” or industry support. This offers businesses a chance to reflect on the Government’s initial thoughts and put forward a considered response to the consultation that seeks to promote the specific needs of the industry and position it as vital to the UK’s economic success, as well as the individual company’s contribution to the UK economy.

The Industrial Strategy has received a mixed reaction from businesses. Carolyn Fairbairn, CBI Director-General, said that “The CBI has long-called for a new Industrial Strategy and it’s welcome to see the Government creating an opportunity for all sectors to get involved”.  However, only a third of 114 board members, at the top 500 UK companies by turnover, thought that the policies introduced through this document would encourage growth, according to research by Ipsos Mori. Len McCluskey, General Secretary of Unite, also said that this strategy could be overshadowed by Theresa May’s recent confirmation that the UK will leave the Single Market.

If this Industrial Strategy generates opportunities or challenges to your business, please do get in touch and we can discuss how we can work with you to best position yourselves, through your response to the consultation on this green paper or through a potential “sector deal” submission to government.