Industrial strategy to be scrapped, Sunak and Kwarteng confirm

May's flagship strategy being "transitioned" into government's Plan for Growth
Photo: BEIS

The Department for Business, Energy and Industrial Strategy and the Treasury have confirmed the industrial strategy is to be scrapped in favour of a “refreshed” vision under the Plan for Growth.

In a letter to business leaders, chancellor Rishi Sunak and business secretary Kwasi Kwarteng said they were taking the “best elements” of the industrial strategy forward but that they would be absorbed into the Plan for Growth. The economic growth plan, published earlier this month, promises "significant investment in infrastructure, skills and innovation, and to pursue growth that levels up every part of the UK, enables the transition to net zero, and supports our vision for global Britain".

They said it was time for a new approach to driving growth and innovation following five years of change in the UK’s economic environment.

“Creating and supporting jobs and helping to drive growth in existing, new and emerging industries is the government’s central economic focus. That is why we are transitioning the industrial strategy into our plan for growth and its related strategies,” Sunak and Kwarteng wrote.

The letter confirms publicly that the government is moving away from former prime minister Theresa May’s flagship policy for economic growth, bringing together government and private-sector funding for R&D, infrastructure and businesses.

It comes after Kwarteng scrapped the Industrial Strategy Council and told its members the government had "decided to mark a departure from the industrial strategy brand".

"We have left the European Union with an ambitious free-trade agreement and legislated to reach net-zero emissions by 2050, and we are working to recover from the devastating impacts of the Covid-19 pandemic,” Kwarteng said at the time.

"It is therefore right that we look again at our long-term plan to drive jobs and economic growth across the UK, drawing on the valuable lessons we have learnt from the 2017 industrial strategy.”

Kwarteng's comments had previously suggested BEIS could be renamed to reflect the change in branding. CSW has asked the department for a response to the reports of a possible name change.

Yesterday’s letter noted that BEIS will also publish an “innovation strategy” within the next 12 months that will replace elements of the industrial strategy. The strategy will take forward the “best elements” of the 2017 plan, including the existing sector deals, include a review of the grand challenges and sector deals.

“We will also develop a vision for high-growth sectors and technologies, putting the UK at the forefront of opportunities and giving businesses the confidence to invest, boost productivity across the UK and enable our transition to net zero,” the letter added.

The letter said the Plan for Growth “refreshes and goes further than ever before on critical policies”, focusing on three “pillars of investment”: infrastructure, skills and innovation.

The letter also reiterated the growth plan’s priorities to tackle regional disparities in prosperity; enable the transition to net zero; and encouraging international investment and trade now that the UK has left the EU.

“The government is, and will continue to be, a champion of the needs of business and industry as we build back better from the pandemic,” Sunak and Kwarteng said. They promised to work closely with businesses and pointed to the Build Back Better Business Council, which has been convened to gather information from industry and government about the challenges and opportunities facing businesses and the economy.

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