By Tom Ridgway, FBUK Public Affairs Manager
The Government’s Industrial Strategy, published today, offers a much-needed framework for growth and investment.
With tangible commitments across eight high-growth sectors (Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital Technologies, Financial Services, Life Sciences, and Professional and Business Services), the Strategy gives businesses a clearer sense of the Government’s ambition for growth – helping them to plan, invest and identify new opportunities over the long term.
This clarity is welcome. After years of uncertainty, family business owners finally have some of the tools they need to make confident decisions for the future.
We particularly welcome the planned Small Business Strategy and the launch of a new Business Growth Service. Both have been shaped with significant input from FBUK and our members, and we look forward to working with the Government on the detail in the weeks ahead.
The Industrial Strategy also includes plans to cut energy costs for thousands of businesses by exempting them from some green energy levies.
Plans for a new British Industrial Competitiveness Scheme could cut costs by up to £40 per megawatt-hour from 2027 for more than 7,000 manufacturing firms by exempting them from extra charges that currently support green energy initiatives.
500 of the most energy-intensive businesses will also have their network charges cut by raising the 60% relief through the British Industry Supercharging Scheme to 90% from next year.
Manufacturers in the UK currently pay some of the highest electricity prices in the world and many family-run businesses are still recovering from the energy price shock in 2022. While further support for businesses struggling to pay their energy bills is welcome, the full picture of exactly which businesses will qualify under this scheme is yet to emerge. FBUK will continue to work closely with decision-makers in our call to widen existing support for businesses struggling with high energy costs.
FBUK has long called for a greater focus on upskilling the British workforce and it is welcome to see the Government commit an extra £1.2 billion each year on skills by 2028-29, including £275 million earmarked for technical training and apprenticeships for priority sectors like advanced manufacturing. This will help family-run businesses to build a stronger pipeline of talent, boost productivity, and ensure they have the skilled workforce needed to grow and compete in a changing economy.
While FBUK are fully supportive of the Government’s mission for growth, the Industrial Strategy will only succeed if it is underpinned by a stable and consistent tax policy. The Government’s pro-growth mission cannot be delivered while family businesses face disincentives to invest, recruit, and pass on ownership.
In particular, we remain deeply concerned about the impact of changes to Business Property Relief (BPR) and Agricultural Property Relief (APR).
Our latest research shows these changes could lead to:
- 208,500 job losses
- A £14.9 billion drop in economic activity (GVA)
- A £1.9 billion loss in tax revenue
Since the last Budget, more than half of the UK’s family businesses have paused or cancelled planned investment. A quarter have reduced headcount or shelved recruitment altogether.
Without urgent consultation, these measures risk forcing premature sales of family firms, stalling job creation and undermining the very goals set out in the Industrial Strategy.
The Government’s long-term ambition is the right one. But it must be matched by tax policy that supports – not penalises – the businesses driving growth in every sector, across every region of the UK.