Labour targets top sectors with bold reforms and export push
The UK’s new industrial strategy promises a more “muscular approach to government,” prioritizing high-growth sectors while navigating global volatility and economic opportunity. Announced Monday, the strategy highlights eight priority industries — dubbed the IS-8 — as the core of Britain’s economic future.
The IS-8 includes: advanced manufacturing, creative industries, life sciences, clean energy, defence, digital and tech (AI and quantum), financial services, and professional services. These sectors will receive targeted support, including cheaper energy, export incentives, and workforce training.
Major reforms and investments
- Cheaper energy for industry: From 2027, a new “British industrial competitiveness scheme” will exempt 7,000 electricity-intensive firms from green policy surcharges. A 90% discount on other grid charges will apply to steel, chemical, and fertilizer producers starting 2026.
- Faster grid connections: A “connections accelerator service” will launch this year to expedite grid access for key projects. New powers will allow regulatory changes to fast-track strategic connections.
- Export expansion: The UK will deepen trade ties with markets like the Gulf, South Korea, and Switzerland. Ambassadors will be tasked with IS-8 support, and UK Export Finance will grow to offer broader guarantees.
- Defence innovation: At least 10% of the defence equipment budget will go to cutting-edge tech like AI and drones. The UK Defence Innovation fund gets £400 million, while the National Wealth Fund may back military-linked firms.
- Startup equity support: The British Business Bank, now capitalized at £25.6 billion, can invest up to £60 million per firm in high-potential UK startups, aiming to create economic returns and scale unicorns.
- Streamlined drug approvals: Medical trial delays will be reduced, and drug approval processes at the MHRA will be reformed. NHS procurement will also prioritize faster adoption of medical technologies.
What’s still missing
Sector plans for life sciences, financial services, and a separate defence industrial strategy are pending. The government also plans additional strategies covering trade, resilience, circular economy, clean energy skills, and critical minerals.
Despite the breadth of proposals, the strategy lacks immediate relief for wholesale energy costs, a top concern for businesses. Ministers hope renewable energy expansion will lower prices over time.
