Having pledged to deliver the fastest sustained economic growth in the G7 as one of its central ‘missions’, Labour in government is going to have to pull any and every lever to achieve it. Given her commitment not to raise taxes (other than the select few already set out), borrow more or implement spending cuts, Shadow Chancellor Rachel Reeves MP will be betting on economic growth if she is to have a chance of delivering the public service reform that is so urgently needed.

Kwasi Kwarteng MP’s decision in 2021 as Secretary of State for Business, Energy and Industrial Strategy to abolish the industrial strategy was widely criticised at the time given the UK’s long-running productivity challenge. Industrial strategy had enjoyed a degree of bipartisan support – going back to Michael Heseltine, through to Peter Mandelson and surviving the coalition years under Vince Cable.

Labour’s manifesto, published last week, confirmed that an industrial strategy will be back if it forms a government. The commitment chimes with calls from business for the strategy to be reinstated: a Make UK survey revealed that 87% of its members said a strategy would give their businesses better long-term vision to plan and invest.

In pledging its return, the Party has committed to an industrial strategy that will see government “work in partnership with industry to seize opportunities and remove barriers to growth”. The Party says it will be “clear-eyed about where the UK enjoys advantages” in order to support a “pro-business environment”.

But what does this all mean for British businesses trying to innovate and sell their product to the world? The best place to start is to understand what it does not mean. Reeves’ Mais Lecture, delivered in March this year, offered some context. Industrial strategy delivering “securonomics” is not, she insisted, a case of “the state picking winners and propping up uncompetitive industries”.

Instead, it is about being “strategic” about the UK’s choices and capacity, “accepting that a country the size of Britain cannot excel at everything”. Businesses thrive when they operate in a predictable, stable policy environment, and Reeves is looking to deliver that by using the weight of the state to foster a pro-growth environment for key industries.

By using the state’s resources to invest in things like education and skills, research and innovation and fairer procurement processes for SMEs contracting with government, Reeves hopes to send the right signals from Westminster. She has already identified the key industries she has in mind. The manifesto set out how a £7.3 billion National Wealth Fund will, amongst other things, upgrade ports and boost supply chain resilience, build new gigafactories for the automotive sector and invest in the UK’s steel industry.

These have been identified because of their strategic and ripple effect across the economy – the strategy is designed to present a set of policies and investments that reinforce each other.  They also expand on the sectoral strategies the Party has already produced in anticipation for government – being for the automotive, life sciences and financial services sectors.

Businesses will welcome a more coordinated approach in respect to the channelling of private sector resource. Rather than picking winners from Westminster, Reeves will be looking to mobilise the state’s influence in a coherent way with the objective of delivering broad-brush policy outcomes. If she is to realise the economic growth on which her other policy objectives so depend, then this strategy could well be the key element of the Party’s policy programme.