The four big wins for workers in the new Industrial Strategy

Today’s publication of the Industrial strategy is a significant step towards a world in which the UK can make the cars, medicines and films of the future.

In a world where other countries race ahead to grow crucial technologies, the UK’s manufacturing industries in particular have been stuck in first gear, kept back by the failures of successive Tory governments to plan ahead, provide stable and competitive electricity prices and properly resource the adult skills system. As the foreword to the new Strategy notes,

“When our industries were at the mercy of change, too many people and communities were left to fend for themselves, with government uninterested in providing a bridge to the future.”

The new Industrial Strategy – laying out how government will support the growth of eight key industries, from advanced manufacturing to clean energy to creative industries – can be the foundation for the bridge to the future. To a stronger, fairer economy – one where more things are made in Britain by workers who are properly trained, fairly paid and respected for what they do. Much remains to still be done – but here are four key elements of the strategy that have a real potential to bring good jobs back to towns and cities across the UK.

1. Aiming for jobs

The Industrial Strategy includes jobs outcomes as one of its six core metrics of success, as well as the creation of a new generation of large British champion companies driving the growth of its eight target sectors. It commits to

“design government support schemes to leverage the maximum possible contribution from the private sector, including co-funding. This will build on the Government’s track record of using procurement, financial levers and proportionate conditionality to incentivise high-quality job creation across the UK.”

The Strategy proposes targeting government procurement “to create good quality local jobs and boost skills”, by having criteria on jobs outcomes baked-in to contracting processes.

As part of the Strategy, the aerospace sector commits to 40 thousand new apprentices over the next ten years, and to growing its direct workforce from 100 thousand to 127 thousand by 2050. As sector plans mature, there will be opportunities for other sectors adopt ambitious targets on good job creation.

2. Partnering with workers to plan for the future

Government is clear on the commitment to work in partnership with businesses, trade unions, as well as devolved and local governments.

Any sector that struggles to recruit, train, or retain workers will get a dedicated Workforce Strategy, starting with an upcoming Workforce Strategy for the clean power sector. If done well, these Workforce Strategies should not just establish the skills and training pathways that can prepare people to work in the target sectors. But also ensure that the jobs are ones that people want to apply for, stay in, and flourish in. That means stable contracts, solid pay, meaningful opportunities to train and progress, and a voice on issues that matter to them at work.

3. Tackling exorbitant electricity prices for industry

Electricity prices for industry have spiralled out of control since the energy crisis, triggered by Russia’s invasion of Ukraine. Industry in the UK now pays double the European average, and four times that in the US. This puts many manufacturing sites to the brink of survival – and so threatens the future of thousands of good quality jobs.

The Industrial Strategy includes two key announcements to reduce electricity costs for energy-intensive manufacturing:

1. A new British Industrial Competitiveness Scheme (BICS), which will exempt up to 7,000 businesses from some of the environmental levies (‘policy costs’) included within electricity bills 1 , reducing their bills by up to £35-40 per MWh, or 25%.
2. The 500 or so largest energy-intensives that already receive exemptions will benefit from changes to the existing British Industry Supercharger (BIS) that sees an increase in Network Charging Compensation (NCC) relief from 60% to 90%.

These are positive steps towards a competitive and modern manufacturing industry, that once in effect will help to secure good quality jobs in sectors like ceramics, automotive, glass and chemicals. However we must not lose sight of the goal to achieve true competitiveness for British industry through electricity price parity with our European competitors like France and Germany.

The Industrial Strategy also announced a new ‘Connections Accelerator Service’, a highly promising opportunity to support industry to access grid connections, for which they currently face wait times of up to a decade. Particularly welcome is the intention to design the service to prioritise connections that deliver high-quality jobs and bring the greatest economic value.

4. Growing foundation industries and supply chains

Any ambition to make future cars, develop next-generation medicines, or build new power plants can only succeed – and can only result in good jobs – if it’s underpinned by a plan for all the work that goes into raw materials, processing, and construction: in other words, foundational sectors.

The trade union movement, alongside industry, has argued for the strategy to recognise the foundational role of our manufacturing and process industries – like steel, chemicals, ceramics, and glass. Their inclusion in the strategy is very welcome. These sectors will benefit from reduced energy bills.

A new Supply Chain Centre will analyse where government can take action to grow or diversify domestic supply chains among these foundation sectors. This work will then guide investments by public finance institutions like the National Wealth Fund. A crucial opportunity to not only reshore manufacturing but future-proof existing sites.

A new Market Demand Guarantee will help make sure that UK manufacturers can make more of the equipment we need for the massive planned programme of electricity grid upgrades.
In all, the Industrial Strategy is a promising beginning to a new chapter in the UK’s economic history. Success will now depend on effective next steps. Trade unions are ready to work with the government to help turn this ambitious vision into a reality. There is no time to waste.

• 1The main parts of industrial electricity bills are i) wholesale costs, ii) Levy (policy) costs and iii) network charges, in that order.