The UK’s Modern Industrial Strategy

Jonathan Reynolds Excerpts

Monday 14th October 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

I am pleased to announce that today, 14 October, I have published a Green Paper setting out our plans to deliver “Invest 2035: The UK’s Modern Industrial Strategy”.

Growth is the No. 1 mission of this Government. Our vision for a modern industrial strategy is for a credible, 10-year plan to drive sustainable, inclusive and resilient growth and deliver the certainty and stability businesses need to invest across the UK. This is the only way to boost our productivity, reinvest in our public services, create high-quality jobs and ensure tangible impact in communities right across the UK.

The industrial strategy will ensure we can build on our significant and historic strengths—which are the foundations of a vibrant, global economy and position us well to seize the economic opportunities of the coming decade.

To unlock this growth, the strategy will focus on tackling barriers in our highest potential growth-driving sectors. In doing so, the industrial strategy will create a pro-business environment and support high-potential clusters across the country. It will also support our net zero, regional, and economic resilience and security aims. We are prepared to tackle the critical issues head-on and make the choices required to kickstart investment.

We must create a strong pro-business environment that supports businesses to thrive and grow. This industrial strategy will bring forward co-ordinated, sector-specific and cross-cutting policies that support businesses to overcome barriers and make it simpler and cheaper for companies to scale up and invest. These will be founded on four principles: long-term stability, renewing our commitment to free and fair trade, easing the investor journey, and being a strategic, growth-focused state. By considering and listening to businesses and experts, we can identify the most effective levers for our sectors—and clusters—across the country. These policy areas include people and skills, innovation, energy and infrastructure, the regulatory environment, crowding in investment, and international partnerships and trade.

Jobs will also be at the heart of our modern industrial strategy, supporting growth sectors to create high-quality, well paid jobs across the country, backed by employment rights fit for a modern economy. We must also be clear-eyed about the sectors which offer the highest growth opportunity for the economy and businesses, including where the UK has existing and nascent strengths. Our strategy will be ambitious and targeted, taking advantage of the UK’s unique strengths and untapped potential, enabling our world-leading sectors to adapt and grow, and seizing opportunities to lead in new sectors.

Over the last 25 years, roughly 60% of our productivity growth was generated by just 30% of our most productive industries. That is why our industrial strategy has identified eight key growth-driving sectors—advanced manufacturing, creative industries, clean energy industries, defence, digital and technologies, financial services, life sciences, and professional and business services—in which the UK excels today and will excel tomorrow. In the next stage of development of the industrial strategy, we will prioritise sub-sectors within these broad sectors that meet our objectives.

We must also ensure our growth unlocks the economic potential of the UK’s cities and regions, by tailoring policy to specific place-based constraints and opportunities. We will give mayors in England the tools they need to grow their economies and develop ambitious 10-year local growth plans. We will also work in partnership with the devolved Governments to make this industrial strategy a UK-wide effort. In doing so, we will explore how the industrial strategy can identify, select and intervene in the most important industrial sites and sectoral clusters across the UK, making them magnets for globally mobile investment.

But this strategy—and our ambitions—can only be realised in partnership. Too often, the impact of industrial strategies has been concentrated in certain regions and not shared across communities. Businesses tell us that past plans have been short-lived, and often business have felt they were done to, rather than with, them. We will engage widely through the development of this strategy, engaging businesses, trade unions, local and devolved leaders, academics, and international partners.

To underscore this approach, I am also very pleased to announce that we are launching the industrial strategy advisory council, and have appointed Clare Barclay, CEO of Microsoft UK, as chair. Ms Barclay brings a wealth of leadership experience at top-flight UK businesses across technology, innovation and artificial intelligence. Further members will be confirmed in due course, drawn from across business, academia and trade unions to provide a broad range of skills and expertise.

Through the Green Paper, the Government are seeking the views of businesses, stakeholders and parliamentarians to inform the continued development of our industrial strategy and ensure it delivers for people and communities across the UK. I would welcome your analysis and insight, as well as the views of businesses and others in your constituencies.

The industrial strategy and growth-driving sector plans will be published in spring 2025. I will keep Parliament informed as the industrial strategy, and industrial strategy advisory council, continue to develop. I am placing copies of the Green Paper in the Libraries of both Houses.

Reforms to company law

The UK has always been a great place for overseas companies to invest and do business. The Government are committed to taking steps to make the UK a place where foreign companies can easily relocate their incorporation. A UK re-domiciliation regime would increase the ease with which companies could move their place of incorporation to the UK, minimising costs and risks that could otherwise arise from the alternative routes and ensuring that the UK remains internationally competitive. Today, we have published a report by the independent expert panel on corporate re-domiciliation, established to consider how best to implement a framework in the UK. The Government welcome the panel’s report and intend to consult in due course on a proposed regime design. A copy of the report will be placed in the Libraries of both Houses.

I can confirm that my Department will lay legislation by the end of the year that will save companies £240 million per year by removing redundant reporting requirements and uplifting the monetary size thresholds for micro-entities and small and medium-sized companies, as well as making technical fixes to the UK’s audit framework. The changes will benefit up to 132,000 companies who will move to a smaller size category, with lighter-touch accounting and reporting requirements more proportionate to their size. These changes are the first step toward modernising the UK’s reporting framework, so it is simpler and better for business, supporting the Government’s aim of having the highest sustained growth in the G7. My Department will also launch an ambitious consultation next year aimed at simplifying and modernising the UK’s non-financial reporting framework. Efforts to modernise will also include examining the potential for updating shareholder communication in line with technology and clarifying the law in relation to virtual annual general meetings.

The Government are also announcing their commitment to speeding up the process for raising share capital. The “Financing Growth” paper committed the Government to implementing the outstanding recommendations from the “Secondary Capital Raising Review”, published in 2022. The changes will be welcomed by business and shareholders and will speed up and simplify the process for companies raising new share capital, for example by reducing from 10 to seven working days the minimum time in which a company must offer new shares to existing shareholders before offering them to the wider market.

[HCWS126]