Plan for Growth: how the Industrial Strategy replacement might impact business

What has been announced in the Plan for Growth?

The government's Plan for Growth, published 3 March, has three pillars of investment and growth: infrastructure, skills, innovation.

The Plan revolves around the idea that not all growth is created equal and suggests the growth driven by the plan and pillars will help with:

• Levelling up the whole of the UK
• Supporting the transition to net-zero
• Supporting the vision for global Britain.

The Plan for Growth replaces the Industrial Strategy and is led primarily by the Treasury and Downing Street as opposed to the Department for Business, Energy & Industrial Strategy (BEIS).

Many of the mechanisms to drive this growth have already been announced by government, including in the 2020 Budget, Spending Review 2020, the National Infrastructure Strategy and the Ten Point Plan for a Green Industrial Revolution. Further announcements on the horizon include, but are not limited to:

• Innovation Strategy
• White Paper setting out the future of the railways
• Policy paper on the system of economic regulation
• A review of R&D tax reliefs, with a consultation published alongside the Budget
• A Treasury net-zero review, which will further consider where the UK might have comparative advantages and how the UK can maximise the economic benefits from the transition
• Shifting incentives to favour low carbon technologies and tackling barriers to action, establishing the UK as a global leader across the low-carbon economy.

There are no mentions of sector deals or grand challenge missions within the Plan for Growth, but existing sector deals will continue, and missions are expected to be reconsidered through the development of the Innovation Strategy. The CBI is expecting further information on sector visions including their role in levelling up over the coming months.

The role of BEIS is also unclear going forward as several new committees and taskforces have been set up, although they are expected to have a part to play. The new groups set up are the:

• National Economy and Recovery Taskforce chaired by the Prime Minister (catalysing growth, levelling up across the UK and driving public service performance and delivery)
• National Economy and Recovery Taskforce (Public Services) committee chaired by Michael Gove, Chancellor of the Duchy of Lancaster (public sector recovery and reform)
• Better Regulation Committee chaired by Rishi Sunak, Chancellor of the Exchequer (regulatory reform)
• Build Back Better Council co-chaired by the Prime Minister and the Chancellor, with the Business Secretary as a standing member. During the second meeting the Plan for Growth and the innovation pillar was a topic of discussion.

Mixed reaction to the Plan for Growth publication

The justification given for replacing the Industrial Strategy is that much has changed since 2017 including Brexit and COVID-19, and there is now a need for a new framework to ‘build back better’. There appears to be buy in from senior government officials (the Prime Minister and Chancellor). Based on what we have heard from members, we will encourage government to ensure there is strong cross-departmental collaboration and cross-party buy in, as longevity is key.

The pillars and goals of the Plan for Growth align to key CBI goals and expectations of the plan and the focus on clear metrics to monitor progress and ensure success is welcomed but the metrics being used is still to be announced.

In our ‘All together now’ report published last year, the CBI reinforced the need to focus on delivery, so the steps taken in The Way Ahead section within the Plan for Growth seem a good step forward but there is still a need for further clarity on delivery over the coming months.

A noticeably different part of the Plan for Growth is the focus on levelling up, and therefore the importance of local collaboration in achieving success. The Plan makes no mention of Local Enterprise Partnerships (LEPs), a review of LEPs is expected imminently.

We are currently seeking member views on how business partnerships in England should operate.

However, the departure from the Industrial Strategy has meant Local Industrial Strategies in England will no longer be formally agreed or recognised by central government. Further clarity is expected in the Devolution and Local Recovery White Paper which, according to the Plan, will be published within the next 12 months.

What has the final Industrial Strategy Council Report said?

The Industrial Strategy Council has been disbanded, it is not anticipated that a similar independent body will be set up to oversee the Plan for Growth, as the Plan is made up of many deliverables and themes rather than one overarching policy piece and therefore individual strategies will be monitored rather than the Plan as a whole.

In their final report, the council has stated that they believe that scale, longevity and policy co-ordination are the key ingredients for a successful Plan for Growth, which mirrors CBI thinking. Interestingly the council has identified 180 policies and commitments in the Plan for Growth, which is more than the 142 in the 2017 Industrial Strategy. Therefore, the concerns previously raised with the Industrial Strategy regarding prioritisation, capacity and scale still ring true with the new publication.

Much like the CBI the council believes that the success of the Plan for Growth will be achieved through active engagement and co-creation with business and other local stakeholders. The council also recommends that government set up a statutory independent body to provide impartial and expert evaluation of progress.

What next?

The CBI will continue to work with government to ensure that business voices remain closely involved in the execution of the Plan for Growth and we are keen to hear members’ views in light of this announcement.

Individual policy teams are actively working on the strands within the Plan for Growth, so please do get in touch with them if you have any questions on the individual strands. For more information on what has been announced in the Plan for Growth, please get in touch with Helena Coe.