7th Report - Industrial Strategy

The government's response

What the committee recommended 32

1. 1
   Build an active partnership between government, business, and unions for industrial strategy delivery Recommendation
2. 2
   Government's industrial strategy aims for inclusive, resilient, and sustainable economic growth Conclusion
3. 3
   Clarify how industrial strategy balances growth, net zero, economic security, and regional objectives Recommendation
4. 4
   Establish robust framework with clear targets and metrics for industrial strategy and sector plans Recommendation
5. 5
   Supplement industrial strategy with a clearer vision for leveraging societal challenges for economic benefit Recommendation

See all 32 recommendations and conclusions

Sources

• 7th Report - Industrial Strategy ↗The committee's report, HC 727, parliament.uk
• 4th Special Report - Industrial Strategy: Government Response ↗The government's response, 12 September 2025, parliament.uk

Recommendations and conclusions 32

1. 1
   Build an active partnership between government, business, and unions for industrial strategy delivery Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We welcome the Government’s proposals to bring forward a modern, 10-year industrial strategy that provides businesses and investors with certainty, stability and a solid foundation upon which to invest and grow. A more active partnership between Government, business, trade unions and local leaders is needed to address the stubborn economic challenges of the past and help business navigate the seminal challenges of the future. The Government must remain agile and responsive to what is a dynamic global environment. However, the price of further inconsistency is high. Delivering this strategy successfully will be a whole-of-government endeavour and we look forward to playing our part by holding the Government to account for its performance. (Conclusion, Paragraph 17) Growth Mission
2. 2
   Government's industrial strategy aims for inclusive, resilient, and sustainable economic growth Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

   We welcome the Government’s plans to bring forward an industrial strategy as a central pillar of its Growth Mission. The direction of growth matters, so we are pleased that the Government intends to use the industrial strategy to help the economy grow in a way that is inclusive, resilient and sustainable. (Conclusion, Paragraph 29)
3. 3
   Clarify how industrial strategy balances growth, net zero, economic security, and regional objectives Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The industrial strategy must clarify how the Government plans to balance any tensions between maximising the headline rate of growth, supporting new sectors and existing jobs in industry, and achieving its net zero, economic security and regional growth objectives. (Recommendation, Paragraph 30)
4. 4
   Establish robust framework with clear targets and metrics for industrial strategy and sector plans Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We recognise that ‘what gets measured gets managed’. The forthcoming industrial strategy and sector plans must set out how their economic contribution to the Growth Mission and the Government’s strategic objectives will be measured. To track the progress of the industrial strategy, we recommend the Government sets a robust framework, with clear targets for the remainder of this Parliament and for the 10-year span of the industrial strategy, along with clear metrics. The framework should allow 70 Parliament and the Industrial Strategy Advisory Council to assess how the industrial strategy is contributing to the Growth Mission as well as the strategy’s contribution to inclusive growth, net zero and the UK’s economic security and resilience. Key targets must be set for each of these objectives and enshrined in public spending agreements between the Treasury and individual departments to ensure that public spending across government is supporting the Industrial Strategy. The Industrial Strategy Advisory Council should conduct an annual progress review against these targets, and this review should be reported to Parliament. This framework should be reflected in plans for each of the growth-driving sectors, while also allowing for sector-specific metrics and targets. (Recommendation, Paragraph 31) Growth-driving sectors and grand challenges
5. 5
   Supplement industrial strategy with a clearer vision for leveraging societal challenges for economic benefit Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We recognise that the UK needs to prioritise and play to its strengths if it is going to move the dial on growth. We support the Government’s decision to focus the industrial strategy on sectors of the economy where the UK has a comparative advantage, or the ability to build one. However, the industrial strategy and sector plans should be supplemented by a clearer vision of how the UK can contribute to, and economically benefit from, societal challenges that are reshaping the global economy. (Conclusion, Paragraph 40)
6. 6
   Specify selective grand challenges to galvanise whole-of-government efforts to boost priority sectors Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We recommend that the Industrial Strategy Advisory Council works quickly to specify some selective grand challenges designed to galvanise whole- of-government efforts to boost the priority sectors set out in the Industrial Strategy. The challenges should be designed in a way to help transform public-private collaboration across a larger part of the economy and stimulate greater potential for growth. (Recommendation, Paragraph 41) International and Domestic markets
7. 7
   Align industrial and trade strategies to maximise growth opportunities for focus sectors Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   In a rapidly developing and uncertain global trade environment and with an ongoing pipeline of trade negotiations, it is crucial that the industrial strategy and trade strategy are closely aligned. Having chosen eight growth-driving sectors as the focus of the industrial strategy, the Government must now ensure that these sectors are supported to maximise their growth opportunities from future trade. (Conclusion, Paragraph 53)
8. 8
   Develop trade strategy with industrial strategy and publish plan to remove export barriers. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We recommend that the Government develops its forthcoming trade strategy with the industrial strategy and makes sure that it enables the 8 growth-driving sectors to grow exports, including in the food and drink sector. We also recommend that the Government publishes a 71 10-year plan for working to take down non-tariff barriers and ‘behind the border’ barriers to UK exporters in the growth driving sectors. (Recommendation, Paragraph 54)
9. 9
   Provide clear framework for DBT overseas teams to support priority sector export opportunities. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   We recommend that Department for Business and Trade teams based abroad are given a clear framework, which they report to Parliament, for how they can support export opportunities for each of the growth driving sectors, in the most important UK markets accounting for 80% of UK export growth. This framework should specify (a) DBT’s estimate of potential export growth opportunity for priority sectors over the decade to come, (b) DBT staff resource on the ground (c) objectives for trade barrier removal and (d) trade promotion budget and activities. (Recommendation, Paragraph 55)
10. 10
    Public procurement policy must align with industrial strategy to incentivise investment and innovation. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    Public procurement if used effectively is amongst the most important tools to drive the industrial strategy. However, for this to be the case, the Government needs to ensure that procurement policy joined at the hip with the industrial strategy and wider growth mission. The Government needs to procure in ways that incentivise private sector investment, encourage innovation and therefore provide very clear long-term demand signals. The Government also needs to ensure that the current barriers facing SMEs are addressed. (Conclusion, Paragraph 69)
11. 11
    Publish public procurement's economic contribution; establish CCO's 10-year plan for industrial strategy. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that alongside the industrial strategy, the Government publishes a clear estimate of the number of jobs in the eight growth driving sectors that are supported by public procurement as well as the contribution of procurement spend to the economic growth of the sectors. We recommend that the Government Chief Commercial Officer sits on the Industrial Strategy Council and provides to Parliament a clear ten- year plan, reported annually, on the way in which public procurement will help deliver on the ambitions of the industrial strategy. This should include clear performance data. This plan and these annual reports should be signed off by the Secretary of State for Business and Trade. (Recommendation, Paragraph 70)
12. 12
    Provide multi-year framework contracts for SMEs; set direct public procurement spend target. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    To support SMEs to innovate and to continue to grow, we recommend that multi-year framework contracts are available for SMEs in the sectors in which the state is the biggest customer, such as defence and life sciences. We also recommend that the Government set a target for how much of public procurement spend is direct spend to SMEs. (Recommendation, Paragraph 71)
13. 13
    Increase long-term public contract opportunities; update procurement strategy with comply-or-explain for UK products. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    To ensure that there is sufficient long term demand signalling, we recommend that Government Departments increase the proportion of public contract opportunities in their pipeline that are five to ten years out. . We also recommend that the Government update its public procurement strategy to include a comply-or-explain process for declaring why products are not procured from the UK. (Recommendation, Paragraph 72) 72 Government support for crowding-in investment
14. 14
    Complex public finance institutions would benefit from a single access point for businesses. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The UK has a complex system of public finance institutions. We accept that different businesses, depending on where they are on their journey, will need different types of financial support. However, our view is that there would be merit in providing a single front door for companies looking for government support. (Conclusion, Paragraph 78)
15. 15
    Consolidate public finance institutions into a single body to simplify business support. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend, in line with the Harrington review, that the Government should consolidate the public finance institutions, especially the National Wealth Fund and the British Business Bank, preferably into a single body to simplify the system for business and investors looking for government support, together with the reforms we set out below. (Recommendation, Paragraph 79)
16. 16
    Industrial strategy must unlock finance to prevent UK startups from leaving for other countries. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The industrial strategy needs to provide ways to unlock finance that allows UK startups, spinouts and other firms to commercialise to scale-up and commercialise their innovations in the UK. Far too many promising companies are leaving for the US and other countries. (Conclusion, Paragraph 82)
17. 17
    Increase British Business Bank support to help UK firms scale-up and commercialise innovation. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    The industrial strategy must set out measures that will be used to help firms access the funding they need to scale-up and commercialise in the UK. As an initial step, we recommend that the Government increase the amount of support the British Business Bank can provide to help firms scale-up. (Recommendation, Paragraph 83)
18. 18
    Create an Office for Investment team to develop regional investment prospectuses in priority sectors. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We welcome the Government’s plans to expand the Office for Investment. To help drive strategic investments across the country, we recommend that a reformed and expanded Office for Investment should be build a team to work with Mayoral Combined Authorities and newly created strategic authorities capable of building a ‘term-sheet ready’ prospectus of investments in our regions, in the eight priority sectors listed by the Industrial Strategy. (Recommendation, Paragraph 86)
19. 19
    Lack of clear budget hinders accountability for government's use of investment funds. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The intensity of global competition between countries to attract internationally mobile investment reinforces the importance of ensuring that the Government uses the financial resources it has allocated carefully and effectively. Without a clear budget, Parliament will not be in a position to effectively hold the Government to account for the way public money is spent. (Conclusion, Paragraph 90) 73
20. 20
    Provide clarity on public expenditure for industrial strategy and Growth Mission through Spending Review. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that through the Spending Review the Government provides clarity about the sum of public expenditure that will be allocated to the industrial strategy and the wider Growth Mission over the remainder of this Parliament. (Recommendation, Paragraph 91) Pro-business environment
21. 21
    High electricity prices deter investment and hinder UK industrial competitiveness. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    High electricity prices in the UK are deterring investment and hurting the ability of UK industries to compete internationally and decarbonise. (Conclusion, Paragraph 101)
22. 22
    Include measures in industrial strategy to level industrial energy prices for key sectors. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that the industrial strategy must include measures that level the playing field with our international competitors on industrial energy prices. Priority should be given to leading sectors, and other foundational industries, in which high energy prices have the greatest impact on the ability of UK-based businesses to compete and attract investment. As an initial step, we recommend the Government consider extending the British Industry Supercharger scheme. (Recommendation, Paragraph 102)
23. 23
    Skills shortages and fragmented system deter growth and investment across UK economy. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    Skills shortages are holding back growth and deterring investment across large parts of the economy, including within the UK’s growth-driving sectors. The skills system is too fragmented and inflexible. The needs of employers must be at the centre of the UK’s approach to training. Local leaders are best placed to know the needs of local employers and work with training providers to adapt provision accordingly. (Conclusion, Paragraph 106)
24. 24
    Commission and publish analysis of skills gaps across eight growth-driving sectors. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that: • Skills England commission and publish an analysis of the skills gaps across the eight growth-driving sectors and report to Parliament within six months. This should include an estimate of the current and future skills gaps across these sectors over the course of the 10-year period of the industrial strategy and provide recommendations on the funding and policy changes needed to fill these shortfalls, including funding gaps for courses that need to be filled. • The Government’s plans in the English Devolution White Paper to devolve more responsibility for skills to local leaders should go further. Responsibility for technical education and training post-16 should be devolved, to the maximum possible extent to Mayoral Combined Authorities and newly created Strategic Authorities, once they have demonstrated capability to manage local systems. 74 • Responsibility and funding for skills policy at a national level should be transferred to the Department for Business and Trade. This will help ensure national skills policy is more attuned to the needs of employers and is more aligned with the Government’s industrial strategy and growth mission. • The Minister for Skills should be a joint ministerial role across the Department for Business and Trade and the Department for Education to ensure there is a coordination between the two departments, as people transition from school to post-16 education and training. (Recommendation, Paragraph 107)
25. 25
    Government struggles to commercialise innovations due to complex RDI institutional landscape. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The UK has strengths in research, development and innovation (RDI) but the Government struggles to effectively support companies, including startups and scale-ups, to commercialise their innovations domestically. We have heard that the UK has a complicated landscape of institutions to support RDI and that this landscape needs to be reviewed. (Conclusion, Paragraph 112)
26. 26
    Review UK public research and innovation institutions for industrial strategy alignment and commercialisation. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that the Department for Business & Trade and Department for Science, Innovation and Technology now conduct a review of the UK’s public research and innovation institutions to ensure they are in alignment with the industrial strategy and that there is clear institutional leadership of research and development for the eight priority sectors, for example by ensuring a lead Catapult in each sector. In particular, the Government should focus on ensuring that the UK has an effective system in place to help UK firms commercialise their innovations in the UK. We recommend the review looks at the lessons the UK can learn from institutions in other countries, such as Fraunhofer Centres in Germany. (Recommendation, Paragraph 113)
27. 27
    Provide further support in Spending Review to substantially scale-up Made Smarter programme. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We welcome the further support the Government has provided for the Made Smarter programme this year. We recommend that the Government provide further support in the Spending Review to substantially scale-up the programme. (Recommendation, Paragraph 114) Governance, oversight and accountability
28. 28
    Simplify the regulatory landscape for businesses to promote economic growth. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The regulatory landscape for businesses needs to be simplified. We welcome the Government’s commitments to regulate for growth, and attempts to offer clarity through the regulation action plan and regulatory innovation office. However, we agree with Lord Livermore that the Government should take this agenda further and we believe that the Government could and should do more. (Conclusion, Paragraph 122) 75
29. 29
    Expand the Regulatory Innovation Office to resolve business regulatory conflicts and ensure coherence. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    We recommend that the Regulatory Innovation Office should be expanded to act as a clearing house for regulatory conflicts and give businesses a place to report conflicting regulations. We recommend that this expanded Regulatory Innovation Office sits within the Cabinet Office and is resourced appropriately to carry out this expanded role. We recommend that the Government publishes a list of the series of projects that the single lead regulator model will be tested through and commits to publishing an assessment of the new model’s impact. A minister from the Department for Business and Trade should help oversee the Regulatory Innovation Office and should be tasked with presenting for resolution examples of regulations from either government departments or regulators, which conflict or which are incoherent, given the growth objectives. (Recommendation, Paragraph 123)
30. 30
    Government's industrial strategy commitments require translation into concrete action for success. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    The Government has sent a positive message in their commitment to cross- departmental co-ordination, engagement with regional leadership, and announcement of an Industrial Strategy Council. However, if the industrial strategy is to be successful, this needs to be translated into concrete action when the strategy is published. (Conclusion, Paragraph 134)
31. 31
    Establish the Industrial Strategy Council on a statutory footing with regular mayoral meetings. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    First, and as a priority, we recommend that the Government introduces legislation to put the Industrial Strategy Council on a statutory footing, alongside the publication of the industrial strategy. We also recommend that the Industrial Strategy Council meets with Combined Authority Mayors on a quarterly basis. (Recommendation, Paragraph 135)
32. 32
    Require Prime Minister to chair quarterly Growth Mission Board meetings and review strategy progress. Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    Finally, it is crucial that the industrial strategy and the wider growth mission has clear support from the Prime Minister. As such we recommend that the Prime Minister chairs quarterly sessions of the Growth Mission Board and that progress on the industrial strategy is reviewed at each such meeting that he chairs. (Recommendation, Paragraph 136) 76