Innovation, investment, industrial strategy: the week that was

The last fortnight in Westminster has been a busy one for our four sectors. This started with the publication of Professor Dame Angela McLean’s review on pro-innovation regulation for advanced manufacturing (including the Government’s response), and the very welcome announcement of £4.5bn of funding for British manufacturing over five years on 17 November. This was quickly followed by the presentation of the Autumn Statement and the publication of Lord Harrington’s Review of Foreign Direct Investment (FDI) on 22 November 2023.  Rounding out a bumper crop of publications, 26 November saw the release of the long-awaited Advanced Manufacturing Plan. Nathan Mathiot, Head of Policy at ADS gives a quick recap of these announcements…

Advanced manufacturing regulation review pioneers cutting-edge technology

As part of the wider Pro-Innovation Regulation of Technologies Review, Dame Angela’s report sets out recommendations on global standards for new tech, clean transport and future mobility, and circular economy. The report defines advanced manufacturing as being “production processes (and not exclusively end products) that integrate cutting-edge science and technology into manufacturing”. At the time of its publication the Government published its own response, confirming that it accepts all the report’s recommendations.

From an ADS perspective, the report looks at the emerging electric Vertical Take-off and Landing (eVTOL) market and recommends that the existing consenting processes for testing eVTOL should be clarified and simplified (more on eVTOLs  ). Additionally, it suggests that the Government should work with the UK National Quality Infrastructure and industry to shape global cyber security standards to promote interoperability. Other recommendations on 3D printing and accelerating the deployment of digital twinning are also of interest.

Interestingly at the Global Investment Summit, the Science and Technology Secretary has since announced that regulatory sandboxes and testbeds will be launched for using hydrogen in aviation and drones for passenger transport.

Aerospace funding and the Advanced Manufacturing Plan

As part of the Government’s Advanced Manufacturing Plan, it announced that £975 million is being made available to 2030 for the aerospace sector to support the development of energy efficient and zero-carbon aircraft technology and that the Made Smarter Adoption programme will be expanded to all English regions in 2025-26 and hopefully UK-wide from 2026-27. ADS’ initial

The subsequent publication of the Plan confirms that the £975m for aerospace will be channelled partly via a new R&D SME support scheme (up to £10m per year) delivered via the Aerospace Technology Institute (ATI). It also reiterates the Government’s commitment to guarantee funding for the ATI to 2031. ADS’ reaction is covered here.

More widely, the Plan sets out a three-pillar approach to invest in the long-term future of manufacturing, cooperate international and build supply chain resilience, and reduce costs and remove barriers to boost competitiveness. It was also accompanied by the publication of the first UK Battery Strategy, which sets out plans for securing the UK’s battery supply chain by 2030. Finally, the Plan noted that the Government is establishing an Industry Innovation Accelerator to drive transformative digital solutions for manufacturing.

Autumn Statement provides welcome boost to business investment

The Chancellor’s Autumn Statement set out the Government’s central economic and tax and spend measures, around which many of the other publications mentioned here sit.

As part of 110 overall business measures, notable announcements included the welcome decision to make full expensing permanent (as called for by ADS), pension reforms to drive investment in infrastructure, planning and electricity grid connection reforms, support for a strengthened concierge offer from the Office for Investment, and the announcement of new Investment Zones. ADS’ full analysis and reaction on its publication can be found here.

FDI review follows ADS activity to enhance the UK’s investment environment

ADS was pleased to previously meet with Lord Harrington and make several recommendations on improving the UK investment environment. As such, it was very welcome to see the publication of Lord Harrington’s review into the Government’s approach to attracting FDI, and the Government’s response, was also released last week.

In principle the Government has accepted all of Lord Harrington’s headline recommendations. For example, a new Ministerial Investment Group will drive forward the Government’s strategic approach towards fostering investment, it will extend the lifetime of the Investment Zone Programmes and bring it to many new regions, the Office for Investment will receive increased resourcing, and finally the Government will conduct a review of the suite of UK government financial incentives, with a view to simplifying this landscape by Spring 2024.

In ADS’s upcoming General Election manifesto we will explore further how the UK should strengthen its business and investment environment, building upon the proposals set out in ADS submission to the Autumn Statement and our paper on the need for a renewed industrial strategy from this summer.

Securing UK advantage: our policy expertise

The ADS policy team works across industry, political and other stakeholders to develop policy recommendations that support our sectors’ collective success. Throughout 2023, this has included over twenty consultation responses alongside a range of other focused policy paper publications.

Following an unusually busy political fortnight, ADS will continue to work with political stakeholders to emphasise where industry will benefit from these announcements, and what more is required to ensure the success of our sectors. We remain clear that industry needs long-term plans and commitment from government to encourage investment and growth opportunities in the UK.

Nathan Mathiot is Head of Policy at ADS, leading overall delivery of policy activities alongside ADS’ Security & Resilience policy. Joining ADS in 2018, Nathan previously worked at the Royal United Services Institute and the UK Parliament.