News 6 | Plant & Works Engineering www.pwemag.co.uk June/July 2025 The UK Government has published its longawaited Modern Industrial Strategy, marking what industry body Make UK has described as a landmark moment for British manufacturing. The strategy, announced by Secretary of State for Business and Trade Jonathan Reynolds, sets out a wide-ranging plan to tackle long-standing structural issues that have hampered industrial growth, including skills shortages, high energy costs, and barriers to finance for small and medium-sized enterprises (SMEs). Stephen Phipson, CEO of Make UK, welcomed the publication, calling it “one of the most important days for British industry in a generation”. “Make UK has led the campaign for a new industrial strategy for many years, highlighting the three major challenges that were diminishing our competitiveness, hampering growth and frustrating productivity gains: a skills crisis, crippling energy costs and, an inability to access capital for new British innovators,” said Phipson. He added that the Government’s response demonstrated a serious commitment not only from the Secretary of State but from the wider Cabinet. The strategy announced “sets out comprehensive and well-funded plans to address all three of these structural failings. Clearly there is much to do as we move towards implementation but, this will send a message across the Country and around the world that Britain is back in business.” As part of the broader strategy, the Government also launched its Advanced Manufacturing Sector Plan, aimed at positioning the UK as a global hub for advanced manufacturing. The plan includes support for innovation, exports, and skills development, and promotes the creation of regional clusters to help spread economic growth more evenly across the country. Lord Richard Harrington, Chair of Make UK, said: “We fully endorse the Government’s ambition to be the best place in the world to start, grow and invest in Advanced Manufacturing and welcome the Sector Plan as the first step to boosting investment in our innovative sector.” He added that the “plan sets out how Government will work with industry to help our businesses become more resilience, boost exports and upskill the people it needs for the future.” The plan includes targeted place-based initiatives designed to support manufacturing clusters and ensure more regions benefit from the jobs and economic activity that manufacturing brings. Addressing one of the sector’s most pressing concerns, the strategy includes measures to reduce industrial energy prices, bringing them more in line with international competitors. Ben Fletcher, Chief Operating Officer at Make UK, said: the Government has listened to Make UK’s concerns that industrial energy prices need to be dramatically reduced in line with international competitors: “All eyes will now be on the consultation which will set an energy intensity threshold for those companies that will be eligible for these lower rates. With over a quarter of manufacturers saying that electricity costs alone make up 11-25% of their total business costs it’s clear that the manufacturers need to be in scope. We will be pushing hard on ensuring that all of the manufacturing sector receives this support and Government moves at pace on the consultation and importantly the implementation.” On skills, the strategy pledges new investment in engineering and manufacturing training to help address the nearly 50,000 unfilled roles in the sector. Verity Davidge, Director of Policy at Make UK, welcomed the move, saying: “We know that the foundation of any successful Industrial Strategy is people. Make UK strongly welcomes the Government’s investment into engineering, and its commitment to reducing the skills gap in our sector. In supporting provision for both recruitment and upskilling, this is a promising start to filling the nearly 50,000 existing vacancies in manufacturing.” She added: “Looking ahead, it is critical that Government develops a long-term vision for skills in the sector, ensuring that all contributions made by employers can be used by employers for both the Growth and Skills Levy and the Immigration Skills Charge, and delivering the crucial funding reforms to ensure the training market is equipped and funded to train the next generation of manufacturers.” In a further move to support innovation and business growth, the strategy includes £7 billion in additional funding for the British Business Bank to improve access to capital for SMEs. Seamus Nevin, Chief Economist at Make UK, said: “”Access to external finance is one of the biggest barriers to growth for small and medium-sized enterprises (SMEs). SMEs make up 99% of the UK economy, so this longstanding challenge has significantly held back the UK economy.” Nevin added: “This announcement of new incentives, backed by an additional £7 billion in funding for the British Business Bank, marks a major step forward to support more UK businesses to invest, scale up, and seize new market opportunities — unlocking the full potential of innovative manufacturing companies to transform and grow.” Government unveils Industrial Strategy in major boost for UK manufacturing
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