The Government’s Industrial Strategy must not shut the door to ‘neglected’ industries such as steel, retail, and hospitality say MPs

The BEIS Committee’s report examines the Government’s development of its Industrial Strategy through sector deals, looking at five sectors of the economy - off-shore wind, steel, construction, retail, and hospitality. The report finds the Government has focussed its efforts on hi-tech sectors such as offshore wind but has not done enough to engage industries such as retail and hospitality in efforts to secure a deal and help boost productivity in these sectors.

On steel, the report finds the Government misrepresented the sector’s proposals for a deal, suggesting Government is actually unwilling to meet the requests of the steel industry. The BEIS Committee calls for the Government to make a new effort to secure a deal and keep to its commitment to develop the UK steel industry and help it thrive in a competitive global market.

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said: “Sector deals won’t be enough on their own to tackle the UK’s productivity puzzle or insulate industry from the fall-out of a no-deal Brexit or of greater friction in our future trade with the European Union. But sector deals are a key plank of the Government’s Industrial Strategy and, if agreed fairly and honoured fully, have the potential to make an important contribution to boosting the nation’s lagging productivity, improving competitiveness, and delivering growth to all parts of the UK.

“The Government’s Industrial Strategy isn’t doing enough for the ‘everyday economy’, in sectors such as retail and hospitality where millions of Brits are employed. The Government’s ‘open door’ offer to industry isn’t being delivered upon in these neglected sectors and the Government needs to be much clearer about the criteria for sector deals and engage more actively and decisively to make these happen.

“On steel, the Government should get back to the table and talk to the industry to get a sector deal done. Having made the steel industry jump through hoops in efforts to get a deal, the Government should now deliver on its side of the bargain.” 

The BEIS Committee’s report welcomes the agreement of an Offshore Wind Sector Deal and the potential to boost clean growth and deliver investment in parts of the UK beyond London and the South East, especially neglected coastal regions. The report calls for the Government to pursue further sector deals that can seek to deliver environmental and societal benefits alongside the economic boost they can bring to industry.

The report also welcomes the “overdue” establishment of the Industrial Strategy Council and recommends the Council sets the metrics and criteria of success for sector deals and publishes regular scrutiny of the process and deals agreed by Government. 

To help to improve diversity in industries which are currently failing in this respect, and to ensure a more effective workforce, both business and Government should follow the example the offshore wind sector has set by including targets for greater diversity in sector deals. BEIS should work with the Department for Education to ensure that no sector of the economy is missing out on potential talent for their workforce.

ENDS

Editor’s Notes

1. A list of report conclusions and recommendations can be found from p.41 of the report.

Details of the steel, retail and hospitality industry proposals for sector deals are included in Chapter 4 of the report.

2. The BEIS Committee’s inquiry received 29 pieces of written evidence and held five oral evidence sessions, including from the sectors on which the inquiry focussed, hearing from academics, think tanks, former National Infrastructure Commission Chair Lord Adonis, the BEIS deputy director for sector deals and from Richard Harrington MP, Minister for Business and Industry. The Committee also held a private meeting on business productivity with Sir Charlie Mayfield, Tony Danker and Jessica Northend of Be the Business and visited the Advanced Manufacturing Centre in Sheffield and Manufacturing Technology Centre in Ansty, both part of the High Value Manufacturing Catapult.