Bring Back the Industrial Strategy

The Liberal Democrats want to reverse this picture. We know the UK has huge potential for sustainable economic growth, which in turn will create good jobs, fund vital public services and build strong communities.

Adopting an industrial strategy is essential to achieving that goal. Yet in 2021, the Conservatives scrapped the UK’s industrial strategy and disbanded the independent body overseeing it. 

Business organisations labelled the move a “short-sighted step that ministers will come to regret”. Businesses view the industrial strategy as a stabilising force that creates certainty for investment and long-term incentives. 

Other major economies understand that, and have adopted ambitious industrial policies. For example, the US passed the Inflation Reduction Act which sets out major incentives to develop green industries. And Europe is responding by supporting its own manufacturing sector.

So today, the Liberal Democrats are calling for the development of a new industrial strategy. This strategy would tackle the big challenges of our time: supercharging the green economy, boosting living standards, addressing regional inequalities, and creating the conditions for sustainable growth.

1. Rebuild business and investor confidence by committing to fiscal responsibility, respect of international treaties, and the creation of a stable business environment.
2. Effectively communicate the objectives and tools of the industrial strategy to industry, to provide clear signals for investment and business decisions.
3. Create broad access to training and skills, by scrapping the lower ‘apprentice’s wage’ band and boosting the takeup of apprenticeships.
4. Set up effective incentives for R&D investment, decarbonisation, and the takeup of digital technologies, especially among SMEs; and ensure that the UK’s regulatory, R&D and tax frameworks are geared towards fostering innovation.
5. Set up a plan for investment in key infrastructure to enable the industrial strategy, covering areas including rail, building insulation, the national grid and EV charging.
6. Create a thriving manufacturing sector by investing in the skills of the future; promoting net-zero transport and energy efficiency; harnessing affordable clean energy; and adopting an ambitious international trade policy.
7. Power scale-up companies, especially outside of London and the South East, using innovative ways of crowding-in private-sector investment, drawing from successful international models such as the French Tibi scheme.
8. Reestablish the Industrial Strategy Council (ISC) and put it on a statutory footing, to ensure vital oversight, monitoring and evaluation of the industrial strategy for the long-term.
9. Explore new ways to improve interdepartmental work on cross-cutting policies, such as giving the Cabinet Office more powers to coordinate and implement industrial strategy.

The UK faces significant challenges, from the ongoing legacy of the pandemic, to the climate crisis, energy shortages, and a stalling economy. It's time for a proactive stance, to ensure the UK is not left behind. This new Liberal Democrat policy sets out a vision for the sustainable economic growth we need to create good jobs, fund public services and strengthen local communities.