Industrial strategy: New dawn or false dawn?

The UK has had around 10 industrial strategies, growth plans or similar since 2011, but can any really claim success? Now it’s the turn of the new Labour administration. Will ‘Invest 2035’, which is currently out for open consultation ahead of its planned release in the spring, prove any different? Andrea Wilson – Director at SME manufacturer Hone-All Precision, long-standing industry advocate and active policy influencer – gives her views to Machinery & Manufacturing.

Currently at ‘green paper’ status, Invest 2035 will set out a 10-year industrial strategy for the UK that pledges not to repeat the mistakes of the past. However, the green paper repeats rhetoric seen many times previously, like ‘providing a solid foundation for investment’ and ‘tackling barriers to growth.’ So, will things really be any better this time around?

“The manufacturing sector desperately need a defined roadmap so we can see how the Government plans to provide long-term commitment and support,” says Andrea Wilson. “Why? Because our investment cycles are typically 3-5 years, if not longer. We need to know that the annual investment allowance (AIA), for instance, will remain the same, preferably guaranteed at least until the end of the current Parliament. Only with a longer-term commitment will companies feel sufficiently secure to invest.”

Mind the (skills) gap.

There must also be a robust plan for skills. Not much would work in the manufacturing sector without the people who design, develop, and manufacture the products that industry requires. However, the current policymakers on this front are somewhat fragmented and duplicated, with very little inclusion for SME manufacturers.

“I dislike the way the green paper references ‘advanced’ manufacturing throughout,” says Andrea. “Advanced manufacturing cannot exist without ‘traditional’ manufacturing, which represents most of the industry and is typically provided by SMEs. Are we excluded then? We’ve been excluded before. Just look at the Apprenticeship Levy.”

The skills gap is a difficult issue for SMEs. Many turn to training providers who typically want the commitment of 6-8 people per day to make it financially viable. However, a 40-employee business like Hone-All sending 6-8 employees to a training course represents 15-20% of its workforce.

“I want to carry out training in groups of two or three, but providers can’t make their “required daily rate” with those numbers. The issue is not dissimilar to the AIA, which is great for large manufacturers, but why doesn’t it cover used machinery? Most SMEs can rarely afford to buy brand new machinery. Why should we be penalised and excluded from investment allowances because we can only afford a second-hand machine?”

Much of the industry agrees that drawing attention to these concerns would be far easier with a ‘Champion for Manufacturing’ or a ‘Chief Manufacturing Officer’ within Government.

“An experienced, knowledgeable, and passionate figurehead could bring everything together under one umbrella. Connect the dots. Connect the sectors. Hold Government to account.”

On target

So, where else will Invest 2035 focus? Well, the green paper indicates a deliberate and targeted approach towards growth-driving sectors. It will also strive for closer relationships with the EU to help smooth trade. Net zero is another topic likely to feature prominently.

Says Andrea: “if net zero is a strategic aim of Government they must clarify exactly what they mean by it. There are so many different definitions. They must also set out how businesses can measure and report their emissions. We need a standard tool, something similar to a VAT return. Only that way will it be a fair and even playing field for everyone.”

The green paper sets out the four overall objectives of Invest 2035 as: rebuilding Britain; supporting job creation; unlocking investment; and improving living standards. The Government is now calling on industry to collaborate on the shaping of what it describes as a modern, ambitious industrial strategy.

Will SMEs get a voice?

“As much as they’ve given us a link to answer their questions, will we hear anything back beyond an automated thank you? Will they have time to read 100,000 responses in time for Spring 2025, or will they turn to familiar contacts who supposedly represent SMEs? I’m concerned we’ll end up with the same people, saying the same things, and it’s not the right message.”

Some fear the new industrial strategy will be too grandiose and complex for SME manufacturers. If the green paper, at circa 20,000 words and 66 pages is anything to go by, it’s a real concern. ‘SME’ only gets four mentions throughout.

“We keep hearing that SMEs are the backbone of industry, so give us a voice and listen to our concerns when it comes to things like business support,” states Andrea. “And I’m talking about real SMEs, not 249-employee SMEs, but 2-50-employee SMEs. A five person SME does not want to pay £800 a day for someone to come along and draw a pretty infographic.”

Needs must

Andrea knows a thing or two about what SMEs need. She’s been the driving force behind Hone-All’s success for 30 years. She also works tirelessly to improve the awareness, recognition, and image of UK manufacturing. Notably, she is highly active in trying to influence the Government’s approach to long-term strategic planning.

“If I didn’t love it, I wouldn’t fight for it,” she states. “The manufacturing industry is full of brilliant, passionate people and we want it to stay that way. To get the right industrial strategy, our opinions must be heard, or we will be saying the same things, and having the same issues, in another 10 years.”

The past couple of decades have been pretty turbulent for UK business, what with the credit crunch, Brexit, the Covid-19 pandemic, the outbreak of major conflicts, more Prime Ministers than we care to count, and the growing climate emergency. Can any industrial strategy survive and succeed in this type of world?

Concludes Andrea: “Can it survive? It depends on its delivery, topics of focus and planned implementation. Can it succeed? It depends on the people feeding into it and the Government’s commitment to fixed targets. Regular progress reporting will be essential, and I understand there’s some commitment to that. It’s all very well setting up a new industry cluster, for example, but who is informing it, how is it performing? What are its KPIs? Importantly, how does it benefit SMEs – the lifeblood of the economy – not just multinational OEMs?”