APPG for Entrepreneurship Newsletter: July 2025

The Government’s Modern Industrial Strategy, published last week, spans 160 pages of ambition – a 10-year plan pledging to make the UK “the best country to invest in” by boosting eight priority sectors, cutting costs and driving innovation. It strikes a lot of the right notes: long-term vision, cross-government effort and partnership with business. But, as any seasoned entrepreneur, policymaker or policy observer knows, long strategy documents are the easy part. This month, we take a look at what needs to go right for the strategy to really deliver.

A consistent Achilles’ heel of past industrial strategies was political continuity. Strategies come and go with alarming speed – the 2017 Industrial Strategy was replaced in 2021, for example, by a new Plan for Growth. As the Industrial Strategy Council’s final annual report noted, a successful strategy needs “scale, longevity and policy co-ordination” across government. The new plan commits to a 10-year horizon and more policy stability. But even a 10-year plan can be quietly shelved if a new Prime Minister or party shifts priorities.

This is not a hypothetical worry. In science and technology policy, we have already cycled from 2012’s Eight Great Technologies, to 2017’s Grand Challenges, to 2021’s Seven Technology Families, and then 2023’s Five Critical Technologies.

If this Industrial Strategy is to avoid the same fate, it should survive beyond one political cycle. In other words, success hinges on turning the strategy into a durable, non-partisan project rather than the latest shiny initiative destined to be renamed or dismantled in a couple of years.

Another ingredient for success is cross-government coherence. This strategy cuts across energy, planning, skills, finance, and more – meaning that every relevant department needs to pull in the same direction.

Achieving regulatory coherence is equally critical. The strategy promises to streamline planning approvals, speed up infrastructure projects and cut the energy costs that burden industry. These are welcome steps. As the Industrial Strategy itself acknowledges, our industrial electricity prices have been among the highest in Europe, with energy-intensive firms paying roughly twice the European average last year.

A notable feature of the new Industrial Strategy is its blend of horizontal interventions (economy-wide fixes like infrastructure, skills and cheaper energy) and vertical interventions (targeted support for selected sectors and technologies). The Government has identified eight high-growth sectors (and 37 specific frontier industries within them) deemed crucial for the UK’s future. Done right, concentrating resources on areas of comparative advantage could drive innovation in fields like clean energy, life sciences and AI.

Balance is key, and walking the line between enabling all businesses and supporting select industries will be a defining challenge. The new strategy will need to deliver on the horizontal basics – from affordable energy to a skilled workforce – that benefit the broad business community, while also executing the vertical bets shrewdly. One encouraging sign is that the plan emphasises providing stability and 10-year commitments in areas like R&D, infrastructure and local growth to give businesses confidence to invest. If government can truly maintain stable policy support, it may embolden industry players to commit long-term to the targeted sectors.

The Industrial Strategy repeatedly stresses “partnership” with business and sets ambitious investment targets for industry. The success metrics also bank on a response from the private sector: the eight priority sectors are expected to ramp up investment sharply over the next decade – headline targets for advanced manufacturing, clean energy, and professional and business services alone add tens of billions. Taken together, the sector ambitions imply over £100 billion in new private investment by 2035.

For this strategy to work, business leaders need to believe in it. Government can prime the pump with public funding and favourable policies, but it’s companies and investors that will have to seize opportunities, scale up and create jobs. That means they need confidence that the UK will remain a stable, attractive place to invest not just this year, but for many years to come. It also means government must be responsive to industry realities: consulting on regulatory changes, ensuring skills initiatives meet employers’ needs and acknowledging when something isn’t working.

As always, we’re keen to hear your views. What conditions do you think will decide the fate of this Industrial Strategy? Are you optimistic about its impact on the entrepreneurial landscape, or do you remain sceptical?

Adviser Update
Latest news, research and events from our Advisers

The Centre for Entrepreneurs has launched a survey to take the pulse of the startup support landscape. They would like to hear from a broad range of startup support providers.

The ERC and National Enterprise Network held a roundtable in June on how to improve data on the UK’s 1.2 million micro businesses. A new working group is being set up to take this forward — get in touch if you’d like to be involved.

The ERC will launch a report from its research on workplace mental health on Wednesday 24 September at The Shard. Get in touch to register interest.

The latest policy paper from the Venture Capital Trust Association covers new proposals for the extension or reform of the VCT scheme rules.

A new online hub has been launched to support start-up engagement with Local Skills Improvement Plans – the employer-led skills strategies underpinning the Industrial Strategy.

The Entrepreneurs Network published the first wave of results from their Entrepreneurs Survey, offering insights into what founders really think about the state of the economy.

In Parliament
Questions and comments relating to entrepreneurship this month

In a debate on VAT registration thresholds, Peter Bedford said:

“England, and indeed the UK, is a nation of entrepreneurs. Across the UK, early risers and late-night grafters—the men and women who channel their entrepreneurial spirits into businesses and serving their communities—form the backbone of our economy. However, we in this place sometimes let them down. That is certainly the case with the current nonsensical VAT registration threshold. Right now, businesses in the UK have to be VAT registered when their turnover reaches just £90,000—an arbitrary figure. Once a small business has crossed that cliff edge, it is hit with added regulatory compliance costs and the need to charge their customers 20% more for their services.”

When asked about the steps his Department is taking to support entrepreneurs, Gareth Thomas responded:

“The Government continue to support entrepreneurs through start-up loans via the British Business Bank and through programmes such as growth hubs in England and “Help to Grow: Management” training across the UK. Later this year we will publish our small and medium-sized enterprise strategy, one key element of which will be to signal our determination to do even more to champion our entrepreneurs, including through a new vision for business support, built around the coming business growth service.”

In a Lords debate on corporate liquidations, Lord Leong said:

“Failure is a reality of business. Even major firms such as Ted Baker, The Body Shop and Wilko have collapsed. We should be thinking about how to support these corporate failures. We must have a more robust system, whether it is the credit system that needs reforming or even British banks. We must incorporate the American culture. Yes, we have to address failures, but more important is how we get up, dust ourselves down and get on to the business market again.”

In a Lords debate on AI and Creative Technologies (Communications and Digital Committee Report), Baroness Wheatcroft said:

“We took evidence from a wide base, including some really exciting and enthusiastic entrepreneurs. They were by no means unanimously critical of the environment they found themselves in, and their asks were not greedy. The loudest call, echoing that of a decade earlier, was the one that the noble Baroness, Lady Stowell, referred to: the spaghetti of different grants and apparent help that would be on offer if they could access it. Some of them told us that in fact they had to pay consultants to help them find a way through the morass of stuff that was on offer and, by the time that they had done the sums, it was just easier and more cost effective to manage without.”

Looking Forward
Consultations and calls for evidence from government departments and Select Committees

HM Treasury – Consultation on the VAT Treatment of Business Donations of Goods to Charity (Deadline: 21 July)

HM Revenue and Customs – Modernisation of the Stamp Taxes on Shares Framework – 1.5% charge (Deadline: Monday, 21 July)

House of Commons Home Affairs Committee – Harnessing the Potential of New Digital Forms of Identification (Deadline: 21 August)

House of Commons Business and Trade Committee – Small Business Strategy (No fixed deadline)

House of Commons Business and Trade Committee – UK Trade with the US, India and EU (Deadline: 31 August)

Cabinet Office – Public Procurement: Growing British Industry, Jobs and Skills - Consultation on Further Reforms to Public Procurement (Deadline: 5 September)