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BBC News
8 hours ago
- Business
- BBC News
What does the new Industial Strategy mean for Scotland?
Nearly a year since winning an election landslide, and struggling to respond to public impatience for change, some of the Labour government's key policies have been published this key one was the Spending Review for the next three years of day-to-day expenditure and four years of capital with that, and dependent on it, are reviews of defence and infrastructure, the latter having not much to do with Industrial Strategy is the latest, and it does affect Scotland, perhaps quite significantly. So what is it all about, and what could that effect be?The idea of an industrial strategy is for government to support industries of strategic importance, which it needs to retain, such as defence, and those that offer the best hopes for growth and jobs. Let's leave aside the history of governments trying to intervene in the market and support British industry. It's not an impressive saga - due to backing the wrong options, supporting declining industries at great cost, or failing to do enough for those showing most promise. And in doing so, there hasn't been much of a consistent future, according to the new industrial strategy, is about championing eight sectors - for support, reducing some costs (primarily energy), boosting trade, optimising the market, getting obstacles out the way, and getting enough recruits in place with the necessary in government jargon as the IS-8, these include clean energy (that means renewables and nuclear), advanced manufacturing, digital and technology, defence, life sciences, the creative sector, financial services and professional and business economy has an interest in energy-intensive industries seeing their bills cut by quarter - around 7,000 firms making, for instance, steel, chemicals, cars, glass, ceramics and cement. But it's not the main outcome for Scotland could be in the sweet spot for other elements of this strategy across all the sectors targeted for support, if all the published strategy's intentions get followed up, and if UK and Scottish governments can collaborate on joined-up policy. There's defence, including naval shipbuilding on the Clyde and Forth and missiles and radar in and around Edinburgh. Clydeside has a world-leading role in making small satellites. There's finance, in which Edinburgh and Glasgow jointly represent an important cluster for remains a lot of petro-chemicals going on at creative industries include Dundee's gaming and Edinburgh's universities around Scotland punch above their weight, notably on life sciences, spinning out digital and technology firms, and playing a big part in attracting international strategy brings a reminder of a Spending Review commitment to reinstate £750m of funds for a super-computer in Edinburgh. Clean energy Clean energy is the one worth watching most closely. It has the potential to transform much of the Scottish economy as well as the view out to sea and across the landscape where more pylons will requires co-operation from the Scottish government on faster planning, on which there's already some agreement, and the new strategy aims at an accelerated route to grid connections for growth the north of Scotland is set to produce much of the wind resource, there is an incentive to locate the most energy-intensive industries close to that resource, thus reducing the need for all those part of that is set to be the Acorn project of carbon capture and storage, centred on centres could be a feature, as well as making hydrogen energy from Scotland's abundant wind power and fresh may be strategic sites chosen, most likely by competition, to get government backing for clearance and pre-emptive grid links. Co-ordinating policy between Holyrood and Westminster is more likely to founder on nuclear energy, at least so long as the SNP runs the show in has opposed new nuclear power for decades, which hasn't been much of an issue while Torness and Hunterston have generated through their changing. The move to smaller, modular nuclear reactors could be part of the energy mix in Scotland, which is why the Scottish Labour leader, Anas Sarwar, chose the Industrial Strategy launch day to visit Torness power station in East Lothian and point to the jobs and investment that could come from the Scottish government embracing a new generation of nuclear a point of difference between Labour and the SNP, and enthuses industrial trade unions. But the SNP can point to the relatively high cost of nuclear power and to its very long legacy of radioactive SNP government also has a party policy of urging defence industries to diversify to more peaceful products. Labour has also taken aim at that, in an era of fast-increasing defence spend and opportunity to see that grow the Spending Review promised six munitions factories, always available to back up Britain's defence needs. Scotland could hope to secure one of them, but that might require a change of heart in Holyrood, to embrace the business of making UK industrial strategy calls for Scotland to have a growth fund for defence. You can probably see how all this might play into next year's Holyrood ought to be easier progress to made through collaboration on skills, mostly devolved to Holyrood but with signs that Westminster wants to do more on Holyrood's turf. Oil and gas skills On training, the strategy has been met with warnings from the oil and gas sector, including its training body are pointing to the gap between declining jobs for those with oil and gas skills and the rise in employment for those in renewable energy. That strategy requires joined-up government as well. And with Whitehall's hostility to further oil and gas drilling, the energy lobby argues that it doesn't look very also a big decision yet to come with big implications for investment in offshore wind due "shortly" from the UK government - whether to change the single GB market for power to one with zonal prices. That could cut prices in Scotland, but at the expense of hostile responses have come from those sectors that don't gain from this strategy. If government picks winners and priority sectors, it relegates others or it makes of the strongest criticism is from hospitality, with its trade body saying today that this shows the government once again failing to realise the damage being done to the industry, following rampant price inflation, higher payroll tax and a higher minimum the Scottish government comes the response that parts of this were already in the innovation strategy set out more than three years ago by Deputy First Minister Kate Forbes. She is concerned that energy price cuts for industry won't happen for two less welcome parts will require Holyrood ministers to have a closer look at the detail and the implications - economic and political.
The Guardian
13 hours ago
- Business
- The Guardian
UK industrial strategy: the key points – and what's missing?
The UK will take a 'more muscular approach to government' under Labour, according to a new industrial strategy that portrays the world as more volatile, but also full of opportunity for British business. The strategy, published on Monday, contains a range of policy measures ranging from lowering energy prices to speeding up drug approvals. One of the most important messages in the strategy is that the government will focus on accelerating growth for the fastest-growing third of the economy. The government has identified eight sectors – the IS-8 – that it judges have the highest potential for economic growth. They are: advanced manufacturing, the creative industries, life sciences, clean energy, defence, digital and technology businesses (including artificial intelligence and quantum computing), financial services banking and insurance, and professional services like accounting and the legal profession. Those sectors will receive the bulk of government industrial support, whether that be through cheaper energy prices, trade support, or skills training. Here are some of the most important policies in the strategy: The centrepiece of the industrial strategy is reducing energy costs for big electricity users – although not immediately. Action to cut energy costs has been a key request from industry for years. The government said that it would introduce a 'British industrial competitiveness scheme' from 2027, to reduce electricity costs for 7,000 businesses that use electricity intensively. Companies in manufacturing sectors such as automotive, aerospace and chemicals will be exempted from paying for the renewables obligation, feed-in tariffs and the capacity market. Those 'policy costs' were imposed to pay for green energy programmes, but industry has long argued that they put British businesses at a disadvantage to competitors. Energy-intensive industries – including makers of steel, chemicals and fertilisers – will also receive a 90% discount, up from 60%, for other policy costs that help to fund the electricity network. The government said the network charging compensation scheme will cut costs for about 500 businesses from 2026. Energy costs are not an issue for companies that cannot even connect to the grid in the first place for factories, energy generation or housing. To reduce the queueing times, a new 'connections accelerator service' – launched by the end of this year – will act as a concierge for projects that could create jobs or speed economic growth. The government will add new powers to change regulatory processes to make it easier for strategically important projects to get connected, and will look at ways of pressuring network companies to speed up. The government wants to be seen as a free trade champion, even as the US turns to protectionism. It highlighted talks on trade agreements with the Arab states of the Persian Gulf, South Korea, Switzerland and Turkey, aligning industrial strategy with Japan, and looking at ways to deepen cooperation with France and Germany. Overseas investment support will be focused on the IS-8 companies, and ambassadors in key markets will be tasked with drawing up plans to help those sectors. UK Export Finance, a government department which guarantees loans for exports, will be allowed to grow further. The government has already committed to increased defence spending, making it an attractive source of funding for British industry in straitened times. At least 10% of the Ministry of Defence's equipment budget will go on 'novel technologies' like drones and AI. To that end, UK Defence Innovation, a body announced in March, will get a budget of £400m. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The government will also provide the National Security and Strategic Investment Fund up to £330m by 2030 to invest in companies that can help UK national security, while the existing National Wealth Fund will be directed to consider military investments. At this month's spending review the government committed another £4bn to the British Business Bank (BBB), which supports small and mid-sized UK companies. That took its total capacity to £25.6bn. The BBB will be allowed to take equity stakes for the first time of up to £60m, which could give government big, direct economic returns if startups become highly valued, billion-dollar 'unicorns'. The government will aim to cut delays to medical trials and 'streamline' drug approval processes at the Medicines and Healthcare products Regulatory Agency to try to accelerate development of new treatments and make it more attractive for companies to invest in the UK. NHS procurement of medical technology will also be accelerated. There is still more detail to come on various important sectors. Notably, 'sector plans' for the life sciences and financial services, plus a whole separate 'defence industrial strategy' have not yet been published. Ministers have also promised a trade strategy, a 'resilience strategy', a clean energy workforce strategy, a circular economy strategy to look at the reuse, repair and recycling of materials and products, and a critical minerals strategy, to add to the huge pile. The government is also relying on other policies to deliver benefits for British businesses – eventually. Monday's industrial strategy did not offer any new policies to reduce wholesale energy bills, by far the most important determinant of overall costs. In the longer term the government hopes that increased renewable electricity supplies will lead to much lower prices.
