Last reviewed 21 February 2017

On 23 January this year, the Government published a Green Paper on its new industrial strategy. Caroline Hand examines the strategy in detail, the 10 pillars of policy and the future economy it envisages.

Britain’s productivity is lagging behind that of our overseas competitors, and economic growth is concentrated in London, with other regions lagging far behind. To remedy this situation, the new industrial strategy prioritises investment in research, skills and infrastructure. Its vision is to regain our competitive edge and ensure that people throughout the UK contribute to and benefit from economic growth. While the strategy is not primarily about the environment or sustainability, the future economy it envisages is one based on clean energy and resource efficiency.

No change on climate change

The Government makes it clear that there will be no backtracking on our climate change commitments in order to boost manufacturing. This contrasts with the American situation where climate change policy has apparently been sidelined, with fossil fuels in the ascendancy once more. The Green Paper states that “on climate change, the settled policy position is reflected in the Government’s commitment to meeting its legally binding targets under the Climate Change Act. How we will continue to meet our legal obligations will be set out, as required, in the forthcoming Emissions Reduction Plan and we have an exemplary record of meeting our obligations”.

There seems to be a tacit assumption in the Green Paper that the future of the UK economy does not lie with those industries which are currently in decline or have largely shifted to other parts of the world. Rather, the Government is seeking to strengthen sectors in which the UK is already a world leader, such as aerospace and motor manufacturing, to upskill the workforce and draw on our strengths in scientific research to develop cutting-edge, innovative businesses.

The 10 pillars

Looking at the strategy as a whole, there are 10 “pillars” of policy, each of which is assigned a chapter of the document.

  1. Investing in science, research and innovation, and in particular doing more to commercialise our successful science base so that new innovations get out into the marketplace.

  2. Developing skills, particularly in science, technology, engineering and maths (STEM). No-one should be left behind, and the skills strategy would include workplace training for adults in declining industries who need to reskill.

  3. Upgrading infrastructure, including energy, water and flood defence. There is an emphasis on improving connectivity, for example through new rail links in the North and Midlands.

  4. Helping businesses to start and grow — equipping them with financial and managerial skills and removing some of the obstacles which confront smaller businesses.

  5. Using strategic Government procurement to drive innovation and develop UK supply chains.

  6. Encouraging trade and inward investment.

  7. Developing affordable energy and clean growth (see below).

  8. Cultivating world-leading industrial sectors by building on our strengths.

  9. Driving growth across the whole country.

  10. Bringing together sectors and places by creating new institutions — for example, by locating new research centres in the North, and creating new models of local government (such as greater devolution of power to cities) to foster growth.

Affordable energy and clean growth

This “pillar” is the one most directly linked to sustainability. Its objective is to achieve a clean, decarbonised energy supply network while keeping costs to business as low as possible. Our energy policy should benefit business by offering opportunities for innovation.

Power generation

The strategy reiterates the commitment to build the Hinkley Point C nuclear reactor. The nuclear programme, like offshore wind, is seen as an opportunity to develop skills and create jobs. While the Government admits that public investment is needed for this project, for the most part, the development of new energy infrastructure will be the responsibility of the private sector. The Government will help by funding research into new technology and creating a synergy between research, energy policy and manufacturing opportunities.

Although renewables will continue to play a part in our energy mix, the document does not have a great deal to say about them. However, there is a specific commitment to reduce the costs of offshore wind.

Electric vehicles and the smart grid

After reading this strategy, it becomes clear that the transition to electric vehicles — including driverless ones — allied to the rolling out of the smart grid, will be happening very soon. Public charging points for electric vehicles are already springing up across our cities. The Government will facilitate this exciting development by intervening in the market, working together with the energy companies and regulators. The strategy explains that “the roll-out of electric vehicles may require important changes to the way our electricity grid works, including physical upgrades to the infrastructure and new frameworks for charging customers as they either discharge stored electricity into the grid at peak times, or draw from it at others”.

Very soon we can expect a 2017 Energy Roadmap which will explain how this can be achieved while keeping costs for business to a minimum. The roadmap will include support for energy efficiency.

Householders and businesses should all have their smart meters installed by 2020, and the strategy comments that “we are already taking steps to be one of the most advanced economies for mainstream smart grids”.

Alongside the electric vehicles, the cities of the near future may see more buses fuelled by hydrogen: the strategy states that the Government is “exploring the potential opportunities offered by hydrogen fuel technologies across multiple applications, including heating, energy storage and transportation”. For more on this area see the article Electric cars in the slow lane.

Energy storage

The year 2016 was characterised by major breakthroughs in energy storage technology — an essential prerequisite to the large-scale deployment of renewables. The Government recognises the importance of energy storage by stating its clear aim to be a world leader in battery technology. To this end, the Government has asked Sir Mark Walport, the Chief Scientific Advisor, to consider the case for a new research institution as a focal point for work on battery technology, energy storage and grid technology. His report is expected very soon, in early 2017. For more on the area of energy storage, see the article Energy storage — filling the gap in the UK power supply.

Waste and resources

Circular economy enthusiasts may be rather disappointed that resource efficiency is only assigned one paragraph of the strategy. However, the paragraph indicates a clear recognition of its importance. The strategy states that “increasing the efficiency of material use across the whole supply chain can deliver huge cost savings and improve the productivity of UK businesses. The Government will work with stakeholders to explore opportunities to reduce raw material demand and waste in our energy and resource systems, and to promote well-functioning markets for secondary materials, and new disruptive business models that challenge inefficient practice”.

This policy will be fleshed out in the forthcoming 25-Year Environment Plan.

Other aspects relevant to the environment

The strategy’s vision of a clean, efficient, well connected, high-tech society has positive connotations for sustainability. The new electric vehicles and trains will be more energy efficient and less polluting. Smart technology and a better digital infrastructure will result in the more efficient use of resources (see the article Big Data — maximising opportunities ). There is also a specific commitment to an investment in flood defence of £2.5 billion by 2021.

The strategy may also reassure those who were concerned at the abolition of the Department of Energy and Climate Change. Rather than reneging on its climate change commitments, the Government is seeking to tie in progress towards decarbonisation with the creation of new opportunities for business in the energy and smart technology sectors. In conclusion, this is a positive, forward looking plan which expresses a genuine desire to create an efficient and productive economy whose benefits will be distributed across the nation and throughout society. We now await the 25-Year Environment Plan which will set out the Government’s specifically environmental goals.