Foreword

Britain stands at the precipice of immense change. That change presents incredible opportunity.

And the Labour Party stands ready to seize it.

For 12 years, the UK has underperformed economically. We lag behind on business investment and productivity, whilst we are forecast to have the worst economic growth of any G7 economy in 2023.

The choices made by successive Conservative governments have left British families uniquely exposed during the cost-of-living crisis. Their decisions have left our public services and our economy weaker and businesses reluctant to invest.

Our new Prime Minister has admitted the problem and tried to claim things will now change. But the truth is the Conservatives are offering more of the same. Stripped bare public services, reliance on too few sectors and reliance on deregulation.

These policies haven’t delivered growth for the last 12 years and there is no reason to believe they will now.

The Labour Party’s central mission is to deliver growth that makes all parts of our country better off. Growth that every family and business will benefit from.

We also know that economic strength needs partnership. State and market. Business and worker. Bringing together the everyday economy and the technological frontier to transform challenge into opportunities.

Our new industrial strategy has partnership at its core because partnership is how we ensure strong, secure growth and a fairer, greener future.

A hallmark of this Conservative government has been to act in the heat of the moment and lurch from crisis to crisis. We know business can’t operate like that. A Labour government will provide a clear and consistent policy framework that businesses can trust and prosper within.

Our industrial strategy has four central missions: delivering clean power by 2030, caring for the future, harnessing data for the public good and building a resilient economy.

Take the climate emergency. Economic growth is not in tension with net zero targets. It’s a mistake to see them as distinct. Tackling them together will create wealth.

With Labour, Britain can become a global leader in producing electric cars, in engineering nuclear technologies, in developing hydrogen.

Labour’s clear driving mission for economic growth is fuelled by a suite of future facing, costed, practical policies. These policies will support your ambitions, inspire creativity, devolve money and power to where it’s needed, and secure prosperity for every part of the country.

Working in partnership with business, civil society and trade unions Labour will grab hold of the national prosperity Britain is capable of. For a fairer, greener future.

Jonathan Reynolds
Shadow Secretary of State for Business and Industrial Strategy

Executive Summary

Britain faces great change and uncertainty; the world feels at once smaller and yet more unknown. Great global challenges and new technological advances continue to expand what we think possible. Yet one constant remains: the capacity of our people to meet that change and prosper. Britain is a country full of talented people and businesses, with ingenuity and ideas in every town and city. We have key economic strengths such as our world-class universities, a thriving life sciences sector, advanced manufacturing clusters, creative industries and many more. But we cannot meet these vast changes alone as individuals or businesses. It requires a national focus. A national effort. One that has been sorely lacking.

Despite our enormous potential, the UK is set to have the lowest growth in the G7 in 2023, having suffered years of low investment relative to our neighbours. The UK’s productivity level remains stubbornly below our peers. As a result, workers have seen no growth in real pay since 2010, leaving families exposed to the current cost of living crisis. A country like Britain should not be looking at a future of low growth and poor productivity.

The defining mission of the next Labour government will be to restore growth. This is the only way to sustainably drive improvements in people’s wages and living standards, to revitalise public services, and to re-energise communities. Another decade of stagnant economic performance is not inevitable. Where successive governments have wrung their hands at supposedly immovable market forces and allowed Britain to fall behind its peers, Labour will take a strategic approach to the economy, investing for our long term needs and forging a partnership with businesses and trade unions around the UK to tackle key challenges and seize the opportunities of the future.

Workers have seen no growth in real pay since 2010, leaving families exposed to the current cost of living crisis.

The strategy outlined in this document is a key part of how Labour will get our economy growing again. This document is a starting point for further conversations with business, from which more detailed policy plans will be developed. It builds on conversations Labour has had with businesses and trade unions from across the country and across the economy. Over the coming months we want to continue to develop it in that spirit of partnership. Labour understands that businesses are concerned about more than their bottom line. They have a vital role to play in building a fair, prosperous, vibrant society as well as a growing economy. Through this partnership across business, civil society and trade unions we can improve the resilience of our economy and place Britain on the economic footing our people deserve.

A modern industrial strategy requires building a partnership between the public and private sectors to meet the immense challenges we face.

The development of coronavirus vaccines provides a useful example of how industrial policy can work, with the state playing a crucial role in partnership with the private sector to achieve a specific goal – not least through long-term investment in the life sciences sector across the past two decades as well as short-term co-ordination.

A ‘mission-based’ strategy of this kind should take a cross-sectoral approach, one that recognises that the different sectors of the economy are inextricably interlinked. A successful strategy will depend on policy consistency, so that businesses and individuals can make long-term decisions and investments. Such consistency has been absent over the past decade, with the 2017 Industrial Strategy jettisoned only two years later.

Labour will provide policy consistency by placing an Industrial Strategy Council on a statutory footing.

This would help end the farce of long-term plans that do not survive the political cycle and make it difficult for businesses to take decisions about their future direction. It would instead offer the certainty needed to increase investment in British business, people, and places.

Our industrial strategy has four missions: delivering clean power by 2030, harnessing data for the public good, caring for the future, and building a more resilient economy.

These missions are the strategic priorities for our industrial policy and setting them out provides a clear signal and organising framework for business. The missions will be crucial to mobilising private sector investment to meet the challenges they contain.

We believe these have the potential to spur innovations that will spill over into other parts of our economy and drive growth and productivity, wages, and living standards. Rising to meet the challenges of the climate crisis offers an opportunity to ensure the jobs of the future are in Britain, as well as an opportunity to bring down energy costs. Harnessing the power of data can revitalise our public services and ensure innovation benefits our wider society not just large corporations.

Our third mission, caring for the future, recognises the vital role the everyday economy has, not just in our economy but in our daily lives. It is where many people work, where we spend much of our money and where we entrust the care of our loved ones to other people. Finally, Britain has acutely felt the dangers of being overexposed to international events. Building our national resilience to future shocks, such as food supply and access to core technologies, ensures that while we look outward to the world, we also ensure our safety and security.

Labour will take a strategic approach to the economy, investing for our long term needs and forging a partnership with businesses around the UK to tackle key challenges

The state must play a different role in different parts of the economy – we differentiate between our sovereign capabilities, global champions, future successes, and the everyday economy.

Labour is clear that all businesses and all sectors make a vital contribution to our economy. This strategy identifies the core pillars of our diverse economy. Our modern Industrial Strategy will strengthen each of those pillars to drive growth and build a more resilient economy. However, we are clear that industrial strategy must make choices: we cannot look to target all businesses in the four pillars with our industrial policy, even if we aim to create a policy environment in which all business can thrive.

Labour is clear that all businesses and all sectors make a vital contribution to our economy. This strategy identifies the core pillars of our diverse economy. Our modern Industrial Strategy will strengthen each of those pillars to drive growth and build a more resilient economy. However, we are clear that industrial strategy must make choices: we cannot look to target all businesses in the four pillars with our industrial policy, even if we aim to create a policy environment in which all business can thrive.