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13 December, 2017

The introduction of a new Industrial Strategy is key to supporting efforts to improve productivity and invest in not just current industries, but those of the future which are set to radically change the ways in which people live and work. However we need to get the strategy correct first, otherwise we’ll be travelling along a rather uneven path!

Although the recent White Paper was widely welcomed by leading industry organisations such as EEF who said it a good foundation for a new partnership with industry “where Government and business can ensure consistency in policy thinking and implementation to ensure the UK is world leader in these new technologies”, some believe the Government hasn't gone far enough with R&D tax relief despite the heavy rhetoric.

I agree with Mark Tighe, CEO of R&D tax specialist Catax, who says that if the Government wants the UK to be a global centre for R&D, it should stop tinkering and make more meaningful adjustments: “The industry was looking for a rise of 4% in R&D tax relief to 15%. Instead, it’s stuck with a raise of 1%. This might look good on paper as it’s actually a 9% rise in the rate of relief overall, but this isn’t change on a scale that will supercharge the potential in our economy as many would wish.”

Although the overall message is positive, as Tighe highlights, ministers are yet again talking about R&D as if it’s all just about cutting-edge firms when the majority of companies that could benefit belong to more traditional industries:

“Not enough businesses know it’s not all about space travel and driverless cars, but a new pint of beer or menu for a restaurant too. Lots of companies don’t realise they are entitled to this kind of relief and it’s often the smaller firms with tighter balance sheets that would benefit the most so this rhetoric has to change.”

A positive development is the introduction of independent scrutiny of the progress of the Industrial Strategy plans. The Government by introducing an independent Industrial Strategy Council is signalling that there will be a strong focus on measuring delivery, which industry will welcome.

In addition the Strategy highlights the Made Smarter Report, which anticipates a Sector Deal for Industrial Digitalisation, which has the potential to make a real difference to the uptake of, productivity boosting, digital technologies.

Overall the release of the Government’s Industrial Strategy White Paper is a welcome first step, but a lot seems to be missing from the recommendations submitted and this does concern me. Also a considerable amount of work still needs to be done if the White Paper recommendations are to become reality but I do feel there is a genuine commitment from both Government and Industry to achieve change, therefore I will reserve judgment for a little longer.

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