UK industrial strategy prioritises advanced manufacturing and life sciences

From 2027, a new British industrial competitiveness scheme will reduce energy costs by up to £40 per megawatt hour, a reduction of around 25%, for over 7000 electricity-intensive business in manufacturing sectors, including chemicals, according to the UK government’s new industrial strategy.

It is hoped that the scheme will bring UK electricity costs more in line with other major economies in Europe.

These companies will also be exempt from paying for the renewables obligation, feed-in tariffs and the capacity market – originally put in place to help pay for green energy programmes. From 2026, energy-intensive industries, including makers of steel, chemicals and fertiliser, will also receive a 90% discount – up from 60% – for network charges normally paid through the British Industry Supercharger.

The government’s ambition is that, by 2035, it would have nearly doubled annual business investment in advanced manufacturing from £21 billion to £39 billion.

This is just one area of focus laid out in the long-awaited industrial strategy, published on 23 June 2025: a 10-year plan to ‘make the UK the best country to invest in anywhere in the world’. In the plan, the UK government identifies eight sectors – the IS-8 – which it says have the highest potential for economic growth and therefore will receive the bulk of government industrial support.

This industrial strategy marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past

Kier Starmer, UK prime minister

As well as advanced manufacturing, the IS-8 includes defence; clean energy industries; digital and technology; creative industries; financial services; life sciences; and professional and business services.

For life sciences the UK government is hoping that, by 2030, the UK will be the leading life sciences economy in Europe; and by 2035, the third most important life sciences economy globally, after the US and China. It said it would be prioritising pharmaceuticals and medical technologies and would aim to slash trial approval times to under 150 days and streamline regulation and market access by supporting the Medicines and Healthcare Regulatory Agency to become a ‘faster, more agile’ medicines regulator.

We want to see more concrete efforts to coordinate between the various emerging strategies and also a long-term plan for the materials and feedstocks that are shared between sectors 

Tanya Sheridan, RSC

For clean energy industries, the ambition is that, by 2035, the UK will have at least doubled investment in frontier clean energy industries to over £30 billion per year. It said it would do this by ‘doubling down’ on clean energy industries with the greatest growth potential – including wind, nuclear fission, fusion energy, carbon capture usage and storage, hydrogen and heat pumps – deliver ‘targeted and catalytic’ funding to support jobs, innovation and growth; and collaborate internationally to diversify supply chains.

For digital and technology, the strategy acknowledges how the UK needs more of its start-ups to turn into scale-ups and the importance of nurturing deep tech firms engaging in activities which have the potential to develop critical capabilities for the UK but who currently face barriers accessing support.

The government’s vision is for the UK to be one of the top three places in the world to create, invest in, and scale-up a fast-growing technology business, with the aim of securing the UK’s first trillion-dollar technology business. This, it said, would be supported by the increase to R&D funding, announced at the 2025 spending review. The technologies identified as having ‘the greatest growth potential’, include artificial intelligence, engineering biology, quantum technologies and semiconductors.

The strategy also talks about strengthening the resilience of all eight IS-8 sectors by supporting the foundational industries and their supply chains, including through a steel strategy in summer 2025 and an enhancement of the Critical Minerals Intelligence Centre to improve its horizon scanning capabilities. It explained that further analysis would be developed by a new Supply Chain Centre, due to be completed by the end of the year, which would review inputs, consider the impact of future trends on demand, and determine what action may be required.

It is interesting to see that one of the aims is advancing basic curiosity-driven research as a goal in its own right, which is a new departure

Kieron Flanagan, University of Manchester

‘This industrial strategy marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past,’ said UK prime minister Keir Starmer in a statement. ‘In an era of global economic instability, it delivers the long-term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people’s pockets as part of the plan for change.

‘This is how we power Britain’s future – by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear – Britain is back and open for business.’

In a response published on LinkedIn, Tanya Sheridan, head of policy and evidence at the Royal Society of Chemistry (RSC) ‘cautiously’ welcomed recognition of the importance of research, the need to tackle barriers to investment and scale-up for technology firms, such as deep-tech chemistry companies, and the role of higher education and skills.

‘Recognising the importance of strategic circular economy approaches, links to the critical minerals strategy and decarbonisation strategy, and the needs of foundational industries including chemicals are also to be welcomed,’ Sheridan continued. ‘However, we want to see more concrete efforts to coordinate between the various emerging strategies and also a long-term plan for the materials and feedstocks that are shared between sectors and that may face supply challenges.’

Sheridan added that chemistry skills and knowledge would be ‘vital’ to achieving the strategy, along with a range of research and innovation, often going beyond the IS-8 sectors being prioritised. She pointed to the government’s forthcoming Skills and Post-16 Education white paper, due to be released next month, saying it should set out how government will tackle the financial sustainability crisis in higher education in England, to ‘ensure quality chemistry degree programmes remain accessible locally across the country’.

Kieron Flanagan, an expert in science and technology policy at the University of Manchester, UK, says the strategy is ‘more of a roadmap than a detailed 10-year strategy’.

‘This one sets as priorities a mixture of sectors and technologies that are well justified in the text … and considers all of the tools that the government has to work with and how they might be mobilised to support these sectors, and how all of this can be co-ordinated and evaluated.’

He says there is a ‘clear statement’ of the objectives of UK R&D policy for ‘the first time since the 1990s’.

‘It is interesting to see that one of the aims is advancing basic curiosity-driven research as a goal in its own right, which is a new departure. There is also a clear objective of R&D to support government priorities, which sounds obvious but has been surprisingly de-emphasised in word and in deed in the UK over the last three decades. And finally, the less surprising economic goal – which is slightly oddly phrased as ”enhancing innovative company formation and growth”.’

[The] government has … taken a step forward in reducing energy costs opposite those faced by our competitors

Chemicals Industry Association

He says the only criticism he would make is that the strategy ‘seems to neglect the reality’ that most technological development is happening elsewhere in the world. ‘The document seems to reinforce the myth that somehow UK R&D will develop UK technological advantages that will be commercialised and exploited in the UK, for UK economic and security advantage. There are mentions of international collaboration and of trade, of course, but the implication is very much the UK as a closed system competing with other closed systems … there is no strategy here for how to bring in promising technologies and commercialise them in the UK – which is something the UK science base can play a big part in.’

In a statement published on 23 June, the Chemical Industries Association (CIA) said it was ‘pleased’ to see that chemicals had been recognised in the industrial strategy to be ‘at the core of Advanced Manufacturing underpinning all domestic manufacturing’.

‘On driving down energy costs, government has … taken a step forward in reducing energy costs opposite those faced by our competitors. The commitment to strengthen and retain the British Supercharger package for our most energy intensive business, alongside the inclusion of chemical businesses under the newly announced British Industrial Competitiveness Scheme sends the right signal.

‘Whilst there is much more to do and details of the scheme will be key in determining whether they boost industrial competitiveness, we will be working hard to ensure all chemical businesses can benefit from the interventions announced today.

‘We encourage Government to continue to engage with us in constructive dialogue to ensure that this strategy translates into real world competitiveness, sustainable growth and a renewed role for UK chemical manufacturing as an engine of economic resilience.’

There is still more detail to come on some of the IS-8 including life sciences and financial services, plus a whole separate defence industrial strategy, all of which the government says will be published ‘shortly’.