London, UK – The United Kingdom government has formally launched its modern Industrial Strategy, a comprehensive 10-year blueprint designed to reshape the nation’s economy by addressing key challenges and opportunities. The ambitious plan sets out specific goals, including efforts to significantly reduce energy prices for businesses, unlock substantial private and public investment, and enhance the skills of the UK workforce to meet the demands of future industries.
A central pillar supporting this strategic vision is a major financial commitment from the British Business Bank. The institution is set to inject £6.6 billion in new capital, specifically earmarked to fuel economic growth and provide critical support for smaller businesses across the country. This infusion of funds represents a significant expansion of the British Business Bank’s capacity, increasing its total financial firepower to £25.6 billion.
Boosting Growth Across Key Sectors
A substantial portion of the new capital is dedicated to high-potential areas of the economy. A new £4 billion initiative, named the British Business Bank Industrial Strategy Growth Capital, will focus targeted investment across eight growth-driving sectors deemed critical for the UK’s future prosperity. These priority areas include: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.
This British Business Bank Industrial Strategy Growth Capital initiative is not only intended to provide direct funding but is also strategically designed to attract additional private sector investment. Government projections anticipate that this £4 billion commitment will succeed in crowding in approximately £12 billion of private capital. Cumulatively, this is expected to deliver around £16.0 billion of capital into these key sectors over the next four years, providing a significant boost to innovation, expansion, and job creation.
Strengthening Regional Economies
Recognizing the importance of balanced national growth, the Industrial Strategy includes a dedicated focus on the UK’s Nations and regions. The British Business Bank is committing £2.6 billion specifically to drive economic development outside of London and the South East.
As part of this regional push, the strategy outlines the launch of two new Nations and Regions Investment Funds with a combined total value of £350 million. These new funds will be strategically located to support businesses in the East of England and the South East of England, areas targeted for enhanced investment support. Furthermore, an additional targeted £100 million is being committed to bolster existing Nations and regions investment funds, aiming to strengthen their capacity to support local businesses and projects.
Investing in Skills and Talent
A skilled workforce is identified as fundamental to achieving the strategy’s long-term objectives. To address this, the government plans a significant increase in funding for skills development, allocating an extra £1.2 billion annually for skills by the fiscal year 2028/29. This sustained investment aims to close skills gaps, support training programmes, and ensure the UK has the talent pool required for the industries of the future.
Recognizing the global competition for talent, the strategy also highlights the crucial role of immigration. It includes commitments to a reformed visa system designed to be more agile and responsive to economic needs. A new Global Talent Taskforce is being established with a specific mandate to focus on attracting international talent into the identified priority sectors where skills and expertise are particularly critical.
Reducing Energy Costs for Industry
High energy costs have been a significant challenge for many UK businesses, particularly those in energy-intensive sectors. The Industrial Strategy aims to tackle this head-on with measures projected to cut electricity costs by up to 25% from 2027 for energy-intensive manufacturers. Key schemes outlined to achieve this include the British Industrial Competitiveness Scheme (BICS) and an expanded British Industry Supercharger programme. These initiatives are designed to provide targeted relief and improve the competitive standing of UK manufacturers in the global market.
Expected Economic Impact
The government anticipates that the combined effect of the initiatives within the modern Industrial Strategy will deliver substantial economic benefits. Overall, these efforts are expected to add around £30 billion of additional Gross Value Add (GVA) to the UK economy, contributing significantly to national prosperity over the coming decade.
The launch of this modern Industrial Strategy, underpinned by the £6.6 billion commitment from the British Business Bank, signals a concerted effort by the UK government to drive long-term economic transformation, targeting specific sectors, regions, and foundational elements like skills and energy costs to foster sustainable growth and competitiveness.
