Will Labour’s industrial strategy go down as the moment Britain finally turned a corner?

With its plan to use state investment to ‘take the brakes off’ seven key sectors, the government might just have come up with the most meaningful industrial strategy of the past 50 years, says James Moore

Britain finally has a government willing to treat industrial strategy seriously. Labour’s new policy – a 10-year plan to boost investment, create skilled jobs, bring down energy bills and make the UK a better place to do business – is bold, well-resourced and refreshingly focused. It is also a marked shift from the half-measures and warm words of the past 50 years.

For too long – since the governments of Harold Wilson, I’d wager – “industrial strategy” has meant glossy documents and little else. Labour’s version, however, has weight behind it – in both ambition and investment, and is genuinely welcomed by business.

In short, the idea is to target vast state resources to help “take the brakes off” key sectors, from advanced manufacturing (which can then be put to use in more cutting-edge industries such as aerospace and pharmaceutical) to clean energy, life sciences and financial services, in a bid to kickstart growth in the British economy as a whole.

But, wait, I hear you say, don’t we already have an industrial strategy? Well, yes – David Cameron launched one. It created the British Business Bank, into which Labour is pumping resources. So, indeed, did Theresa May.

Trouble is, the earlier plans went longer on words than they did action. The Starmer government’s stab at this couldn’t be accused of that. It is genuinely ambitious – not just with rhetoric but with resources.

The Cameron government’s “Industrial Strategy Explained” booklet has a couple of billion-pound announcements. Starmer’s is splattered with them. Even if you allow for the usual double counting of things that have already been announced, it has firepower.

It also shows – and this is just as important – some evidence ministerial ears are listening. Perhaps the best example of the latter comes in the form of the package of measures designed to cut the ruinous energy bills faced by energy-intensive manufacturers.

There will be “Network Charging Compensation” of 90 per cent, to mitigate the high costs of electricity for energy-intensive industries, helping them remain competitive in the global market by matching what Germany and France offer to theirs. An indirect compensation scheme to ease the burden of carbon taxes on the steel industry will be renewed. The “British Industrial Competitiveness Scheme” is intended to further reduce the burden of green taxes.

“The Industrial Strategy is a step in the right direction towards competitive electricity prices and a better, more effective business landscape,” said trade body UK Steel.

This doesn’t mean all is sweetness and light. The UK’s over-reliance on natural gas means that businesses – which don’t enjoy the benefits of the Ofgem consumer price cap – will continue to face some of the world’s highest electricity bills even after these measures. It is an issue in need of addressing – one not amenable to a quick fix.

But Gareth Stace, director general at UK Steel, was nonetheless encouraged to state that “we are climbing slowly up the foothills of the mountain we need to climb”.

Under the plans, eight sectors will receive backing and largesse – they’re being referred to as the “IS8”. Snappy, huh? We’ll hear that repeated a lot, at Prime Minister’s Questions and beyond. The lucky eight are advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. For the record, Cameron’s document had five.

The government has been reluctant to engage in “picking winners”, which involves directing resources towards specific industrial sectors – this was prevalent in the 1970s and repeatedly went badly. But this is an example of that, whether ministers want to admit it or not.

That said, these are all fairly obvious targets to focus on – partly because they include obvious existing strengths. Life sciences and creative industries, for example. Even tech.

There is also a nod towards the ever-vexed subject of tax in there: a commitment to cap corporation tax at 25 per cent and a promise to retain the tax breaks for business investment, first brought in by Rishi Sunak.

However, as the decision to hike taxes on jobs through higher employer national insurance contributions (NICs) shows, that is far from the only business levy. And with the potential of a tax-raising budget looming, there are questions to be raised here. The strategy states the need to “ensure our tax system supports growth”. How that squares with the nation’s shaky public finances remains to be seen.

I confess that the packaging made me chuckle: the document has so many swooshes that you wonder if they asked the chap who draws DC Comics’ The Flash for advice on the design. You can almost see the ghostly image of a high-speed locomotive on the front cover – ghostly because, well, are we ever going to see them running? Britain’s equivalent of a bullet train service is being built at the speed of a dyspeptic tortoise, with grotesque cost overruns, disputes and good old-fashioned British can’t-do spirit cramping any style it might have had.

These are issues that need to be overcome. The promises on deregulation – cutting red tape – also need to be seen in context. How often have we heard governments banging on about this, only to see big-money projects getting gummed up in process and politics?

The CBI’s plea for further streamlining of the “Development Consent Order (DCO)” process, for obtaining consent for nationally significant infrastructure projects (NSIPs) in England and Wales, is well made. Ditto the need for a long-term skills plan for infrastructure development “that embraces innovation”.

Skills are also among those things Britain’s politicians like to vent copious quantities of hot air on, without much in the way of progress when it comes to closing the skills gap.

The general consensus among business groups, however, is that the strategy nonetheless represents a good start – something to build on. And I would agree with that.

Trouble is, it is one thing to get a service in without the umpire calling “fault” – quite another to win a match. That will only happen if the government succeeds with implementation. And its record to date is sketchy.

Business secretary Jonathan Reynolds, whose name comes after Starmer and Rachel Reeves on the document, has looked like one of the more quietly competent ministers in a government not overly blessed with that commodity.

This should help – particularly if he has Starmer’s ear. But the government still has an awful lot to prove.