BPF Response and Summary to the Industrial Strategy 2025

BPFs Director General, Philip Law reaction to the strategy:

“We welcome the Industrial Strategy! It gives prominence to the role of manufacturing in the UK, which plastics are at the heart of, being the country’s third largest manufacturing sector by employment. We are pleased to see ‘materials’ recognised as ‘foundational industries’ — something the British Plastics Federation has been calling for. So many aspects of the Industrial Strategy depend upon plastics: Advanced Manufacturing , Defence , Digital Infrastructure, Clean Energy , to name but a few. Plastics are crucial to national security in numerous ways, and this Industrial Strategy should also provide opportunities to sharpen our competitive edge internationally too. There is of course more detail for the government to work out and we will continue fighting for our members to receive their fair share of support.”

 

The BPF has summarised The UK’S Modern Industrial Strategy published on Monday 23rd June 2025. To read the latest BPFs Key Policy Requests, click here.

Alongside advocating for the plastics industry in weekly meetings with the Department for Business and Trade (DBT), the BPF also inputted directly into the Industrial Strategy consultation. Below are key takeaways of relevance to the sector.

Foundational Industries

• Having been advocating for the inclusion of the plastics industry as a ‘Foundation Industry’, it was good to see government clarifying what those sectors will be.
  • Plastics are indirectly covered through materials, chemicals and composites, which are recognised as foundation industries vital to the success of high-growth sectors (like automotive, defence, clean energy and construction). These are all sectors where plastics play a vital role. It is important to note that we are seeking clarification on the Standard Industrial Classification (SIC) codes stated in the strategy.
  • The original list of Foundation Industries can be found here.
• The strategy has also set out the development of a new Supply Chain Centre which “will review inputs, consider the impact of future trends on demand, and determine what action may be required, such as domestic capability building, diversification, or strategic international partnerships”. This will include understanding the issues around national security of supply (i.e. polymer supply).

Advanced Manufacturing Plan

• In terms of investment in Advanced Manufacturing the government has outlined £4.3bn for Advanced Manufacturing over the next five years, including £2.8bn for R&D (mostly within existing programmes). Key commitments include a £99m national rollout of Made Smarter Adoption and £40m for new Robotics Adoption Hubs. Encouragingly, the definition of AI includes practical technologies such as digital twins, predictive maintenance, and generative design. The automotive focus centres on autonomy and electrification.

Circular Economy

• The strategy emphasises the importance of exploring practises like re-use and recycling and how they can boost resilient supply chains and reduce the risks posed by climate change. More information will be published in the Circular Economy Strategy for England due to be published in the Autumn of 2025. This will set out the governments approach to recycling of materials and products.
• Net zero will be a high priority when implementing the missions set out in the industrial strategy and this will include strategically boosting green manufacturing services and the circular economy.

Energy

• An increase in support for the most energy-intensive industries eligible for the British Industry Supercharger package, with an uplift of the Network Charging Compensation (NCC) scheme from 60% to 90%. This will provide additional price relief from 2026 for around 500 eligible businesses, further reducing the competitive gap with comparable neighbouring countries.
  • From 2027, a new British Industrial Competitiveness Scheme will reduce electricity costs by c.£35-40/MWh up to 2030 and support thousands of businesses. The scheme will benefit manufacturing electricity intensive frontier industries in the IS-8, such as automotive and aerospace, and foundational manufacturing industries in the supply chains, such as chemicals. Eligible businesses will be exempt from paying the costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market. The scheme will bring GB electricity costs more in line with other major economies in Europe, and level the playing field for GB businesses. Eligibility will be determined following consultation, which will open shortly, with a review.
  • There is also the consultation for low carbon industrial products reporting initially focussed on steel, cement and concrete but with view to include Plastics in the future. The BPF will be responding to this consultation which closes on 15th September.
• The Clean Energy Industries Sector Plan – includes a new £1 billion Clean Energy Supply Chain Fund under Great British Energy. Also developing an industry growth plan to unlock domestic supply chain opportunities, greater sharing of data and early estimates of future demand. Collaborating with Ofgem, network operators and wider industry include the development of an Industry Growth Plan as well as supporting Ofgem’s new Advanced Procurement Mechanism and exploring a new Market Demand Guarantee to stimulate the domestic production of key electricity network equipment.
• Introduce a UK Carbon Border Adjustment Mechanism (CBAM) by January 2027 to ensure imported carbon-intensive products face equivalent carbon costs as UK-made goods. This levels the playing field for UK manufacturers and prevents emissions being offshored, supporting domestic investment in decarbonisation. It is important to note that plastics do not currently fall within scope of CBAM.
  • Strengthen EU cooperation by exploring UK access to the EU internal electricity market, continuing joint work on energy regulations, and progressing towards linking UK and EU Emissions Trading Schemes—potentially enabling CBAM exemptions for aligned sectors.
• Deliver a new “Connections Accelerator Service” to streamline grid access for major investment projects, “prioritising those that create high-quality jobs and deliver significant economic benefits.” This service is expected to begin operating at the end of 2025.

Export and Trade

• A trade strategy will be published separately.
• Increased support for exporters in the industrial strategy 8 sectors (IS-8) linked supply chains (including plastics used in packaging, healthcare, construction).
• Expansion of UK Export Finance and digital export tools should support plastics SMEs in accessing new markets.

Skills

• Providing investment of over £100 million over three years to support engineering skills in England, working with Skills England to determine how this can increase the pipeline of skills through further and higher education and apprenticeships. This will include launching Technical Excellence Colleges to address shortages in engineering, which is critical to the skills needed in priority sectors including Advanced Manufacturing,
• Introducing short courses in England, funded through the Growth and Skills Levy, in digital, artificial intelligence and engineering to include the Advanced Manufacturing sector.
• Establishing a new Upskilling and Reskilling programme to address the need for short courses with a focus on SME training needs. 
• Industries across Advanced Manufacturing have acknowledged the need for a diverse, inclusive and sustainable workforce and we will work with them through a co-led Equality Charter, including the target to increase women’s representation in the sector to 35% by 2035. This demonstrates the sector’s commitment to embracing the opportunities of a more diverse workforce.

 

Alongside the publication of the Industrial Strategy, government also published their Sector plans for the 8 sectors (IS-8) identified as having the greatest growth potential. 5 have been published so far and more will follow soon (click here).

The Advanced Manufacturing Plan is specifically focused on 6 “frontier” manufacturing sectors - Automotive, Batteries, Aerospace, Space, Advanced materials, and Agri-tech and the supply chain.

Cross cutting measures for manufacturers include:  

• Up to £99 million to expand the exemplar Made Smarter Adoption programme which supports manufacturing SMEs to take-up and adopt new technologies.  
• The continuation and development of the Made Smarter Innovation programme, supporting SMEs to develop and commercialise innovative digital technologies. 
• Establishing a brand-new series of Robotics and Autonomous Systems (RAS) hubs providing a number of “one-stop-shop” to accelerate firms to take-up robotics. 
• Ensuring an improved offer of capital to scale-up Advanced Manufacturing businesses as part of the British Business Bank’s £4 billion Industrial Strategy Growth Capital offer
• Establishing a brand-new Grid Connections Accelerator to support business on priority projects connect to the grid much faster. 
• Creating the new Supply Chain Centre to conduct data-driven and industry informed reviews of critical supply chains, ensuring any vulnerabilities are appropriately addressed.  

The Defence Plan – uses the increase in defence spending to revolutionise procurement to support SMEs, committing at least 10% of the MOD’s equipment budget for novel technologies.

The Clean Energy Industries Sector Plan – includes a new £1 billion Clean Energy Supply Chain Fund under Great British Energy. Also developing an industry growth plan to unlock domestic supply chain opportunities, greater sharing of data and early estimates of future demand. Collaborating with Ofgem, network operators and wider industry include the development of an Industry Growth Plan as well as supporting Ofgem’s new Advanced Procurement Mechanism and exploring a new Market Demand Guarantee to stimulate the domestic production of key electricity network equipment.

The Digital and Technology Plan – includes £2 billion will drive the AI Opportunities Action Plan, including up to £500 million for a new Sovereign AI Programme, £187 million to help train a million young people in tech skills, as well as targeting R&D investment such semiconductors in Wales and quantum technologies in Scotland.

Professional and Business Services – ensuring the UK Professional and Business Services sector becomes the world’s most trusted adviser to global industry, revolutionising the sector across the world through adoption of UK-grown AI and working to secure mutual recognition of professional qualifications agreements overseas.

Creative Industries - Maximizing the value of our Creative Industries through a £380 million boost for film and TV, video games, advertising and marketing, music and visual and performing arts will improve access to finance for scale-ups and increase R&D, skills and exports.