A new briefing by sustainable business organisation Aldersgate Group has highlighted the vital role clean industry plays in the UK’s economic growth.
The report, titled Placing Decarbonisation at the Heart of Industrial Strategy, is the first in a series of briefings planned by Aldersgate Group that seek to outline how the UK government can create an effective industrial strategy that prioritises decarbonisation and growth.
The report lays out five recommendations for the new Labour government to boost the impact of low-carbon industry for the economy. These recommendations include setting up an Industrial Strategy Council to inform policy developments, creating a clear industrial strategy that identifies which value chains are a priority for growth, setting out a decarbonisation strategy with pathways for all industry and manufacturing sectors, and taking a whole-value chain approach to developing policy intervention.
The briefing also notes that any industrial strategy should bring together a package of policy interventions, ensuring that policy considers all departments, in order to “enable success and remove barriers as they emerge”.
Research from Aldersgate Group warns of the risk of inaction on green industrial policy, cautioning that £224 billion or 5.9% total gross value added (GVA) risks being wiped out from the UK economy by 2050 without further policy support for heavy industrial decarbonisation.
The report also argues that the UK is significantly behind other countries with better investment incentives, such as the US’s Inflation Reduction Act (IRA), and as such has missed opportunities to develop in industry, particularly in battery manufacturing and supply chains, and notes that the UK now risks the loss of a potential £13.3 billion in car exports as electric vehicle sale targets are introduced across the world.
Rachel Solomon Williams, executive director at Aldersgate Group, said: “Industrial strategy will play a crucial role in achieving the Government’s mission to drive consistent and sustainable economic growth across the UK.
“This briefing outlines what a successful low-carbon industrial strategy looks like, and how it can create a policy landscape that gives businesses the certainty they need to invest confidently, while strengthening our domestic supply chains to ensure the UK public see the benefits.”
Representatives from across the industry have welcomed the report, with Martin Casey, director of public affairs, communications and social impact at Cemex EMEA calling it “a thoughtful, thorough and rigorous analysis of what a successful industrial policy should be about.”.
Stew Horne, head of policy at Energy Saving Trust, agreed, noting that the report “comes at a critical time” and adding that “a joined-up industrial strategy approach will be vital to ensure the UK Government delivers on this ambition. The retrofit supply chain must be supported to expand sufficiently if it is to meet an increase in demand. Alongside this, measures to incentivise young people into the industry as well as to reskill the existing workforce to install low carbon technologies will be crucial to ensure the industry can deliver at the pace and scale required.”
