Out-Law News 1 min. read

UK industrial strategy should be 'dynamic document' to account for effects of Brexit, say MPs


The UK government's industrial strategy should be a "dynamic document" that takes account of developments in the negotiations over the terms of the UK's exit from the EU, a committee of MPs has said.

In a new report, the Science and Technology Committee welcomed the government's publication of its industrial strategy earlier this year, but said the strategy should be further developed to align more with "the government’s Brexit strategic aims".

"There is a weakness in the industrial strategy in that it could give more room for discussing or even acknowledging its links with Brexit," the Committee said. "The industrial strategy must be configured to shape our exit negotiations, but equally those negotiations will affect what can be achieved through the industrial strategy as well as how the different measures envisaged should be prioritised and re-prioritised."

"The complicating factor of Brexit, which could in time render the industrial strategy over-ambitious or under-ambitious depending on the terms of the exit and how well our new research and trading relationships with others turn out, makes it difficult to set a yardstick for judging the eventual success of the strategy – the possible scenarios are perhaps inevitably too difficult to map out at this stage. This is, nevertheless, an area that the government must address as the Brexit negotiations get under way and the industrial strategy evolves in what we hope will be dynamic document," it said.

In its report, the Committee specifically called for the "next iteration" of the industrial strategy to "give a fuller indication of the relationship with the proposed post-Brexit regulatory environment".

In its industrial strategy, the government announced it would "invest an additional £4.7 billion by 2020-21 in R&D funding", and set up a new Industrial Strategy Challenge Fund to channel funds, including potentially to projects on robotics and artificial intelligence, leading edge healthcare and medicine, manufacturing processes and materials of the future, biotechnology and '5G' mobile networks, among others.

The government announced a review into "industrial digitalisation" at the time, and said that a new strategy "to make the UK the best place in the world to invest in life sciences" is also being developed, as well as further plans on how to capitalise on the UK's creative industries strengths by "utilising and developing new technology, capitalising on intellectual property rights, and growing talent pipelines".

The government also said it would consider industry suggestions on steps that could be taken to help improve productivity in their sector, such as deregulation, tax breaks, targeted funding or moves to tackle market access barriers with other countries.

However, earlier this month, the Competition and Markets Authority (CMA) issued a warning about such 'sector deals'. The CMA said sector deals, and similarly policies that support businesses on the basis of their location, "may distort competition between firms that receive support and those that do not" and "can lead to unintended consequences".

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