Committee publication · Special Report · 12 September 2025 · HC 1305
4th Special Report - Industrial Strategy: Government Response
From: Business and Trade Committee
Inquiry: Industrial Strategy
Summary
This is the government's formal response to the Business and Trade Committee's June 2025 inquiry into the Industrial Strategy. The government accepts the Committee's ten assessment criteria and outlines how its published Industrial Strategy—with eight growth-driving sectors and sector-specific plans—addresses each test, including metrics for monitoring, capital access reforms, energy price support, skills devolution, and institutional leadership.
Key findings
- Government commits to putting the Industrial Strategy Advisory Council on a statutory footing via legislation (IS Bill) and establishing clear monitoring and evaluation metrics: business investment, GVA, productivity, trade exports, labour market outcomes, and number of large home-grown firms.
- Eight growth-driving sectors targeted with measurable ambitions: Advanced Manufacturing (£39bn annual investment), Defence (Europe's leading exporter), Clean Energy (£30bn+ investment), Tech (top three globally by 2035), Creative Industries (£31bn), Financial Services, Life Sciences (Europe's leader by 2030), and Professional Services (£65bn investment).
- Public financial institutions (National Wealth Fund, British Business Bank, UK Export Finance) to be coordinated via new UK Strategic Public Investment Forum; British Business Bank capacity rising to £25.6bn (two-thirds increase) with £4bn additional capital for IS-8 sectors.
- Energy price support expanded: Network Charging Compensation scheme increased from 60% to 90% from 2026; new British Industrial Competitiveness Scheme from 2027 reducing electricity costs by £35–40/MWh for 7,000+ businesses.
- Skills England to deliver quantitative analysis of job demand and education pathways needed; 75% of Adult Skills Fund devolved to Mayoral Strategic Authorities by August 2026; Department for Business and Trade to coordinate national skills policy with Department for Education.
Government position
The government accepts the Committee's ten tests and outlines implementation across all areas. Key acceptances: statutory status for Industrial Strategy Council (via IS Bill); annual monitoring and evaluation by Council; coordination of public finance institutions; expanded energy support; devolved skills funding; and establishment of delivery mechanisms aligned with Growth Mission governance. The government does not fully accept the recommendation to consolidate public finance institutions into a single body, instead opting for coordination via the Strategic Public Investment Forum. On Prime Minister chairing quarterly Growth Mission Board meetings, the government states the Chancellor chairs the Board and the Prime Minister engages 'frequently via other means' rather than committing to quarterly chairing.
Tone
ProceduralTopics
Key actors
Sarah Jones MP, Minister of State for Industry, Business and Trade Committee, Industrial Strategy Advisory Council, Department for Business and Trade, British Business Bank, National Wealth Fund, Skills England, UK Research and Innovation (UKRI)
Notable line
“… that delivery is key to success and welcome the ten tests set out in the report as metrics to assess 2 progress.”
Key Quotes
“I agree wholeheartedly that delivery is key to success and welcome the ten tests set out in the report as metrics to assess 2 progress.”
“The overarching vision for the Strategy is to focus on the critical need to increase business investment, capturing a greater share of internationally mobile capital, spurring domestic businesses to scale up, and supporting small and medium-sized businesses reliant on supply-chains.”
“The Government agrees that public procurement is a powerful lever for driving economic growth in the UK.”
“The Government agrees that public finance has an ability to crowd-in private investment into key sectors and places, which is crucial for firms starting and scaling; and for increasing productivity growth across the UK economy.”
“The Industrial Strategy committed to putting the Industrial Strategy Advisory Council on a statutory footing when parliamentary time allows.”
“The Prime Minister has made his strong support for the Industrial Strategy clear, recognising it as a pivotal moment for Britain's economy.”
Source · parliament.uk record ↗