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The Guardian’s View on Labour’s Industrial Strategy: A Step Forward, but Finance Remains Untouched
On June 26, 2025, The Guardian published an editorial analyzing Labour’s new industrial strategy, marking it as a significant shift from post-2008 policies while highlighting its failure to address the financial system’s role in Britain’s economic imbalances. The strategy embraces a hands-on state role but leaves powerful financial interests untouched, potentially limiting its transformative impact.
Key Elements of Labour’s Strategy
- State Intervention: The strategy breaks with economic orthodoxy, positioning the government as an investor, risk absorber, and catalyst for structural change, particularly in advanced manufacturing and clean energy.
- Investment Focus: Public investment in clean energy is set to reach £30 billion annually by 2035, with proposals like a national wealth fund signaling a more interventionist approach.
- Target Sectors: Emphasis on high value-added niches like life sciences and green technology supply chains, acknowledging the UK’s inability to compete in mass manufacturing dominated by lower-wage or heavily subsidized economies.
- Critique of Market Failure: The strategy highlights regional inequality and energy dependence as failures of market-led policies, advocating for coordinated national capabilities.
Promises and Limitations
- Energy and Industry: The strategy promises lower electricity prices for energy-heavy industries, but details on how Treasury relief will close cost gaps with global competitors are unclear.
- Cautious Rhetoric: Despite bold interventions, the strategy’s messaging is subdued, with the state’s role underemphasized, possibly due to political fatigue from past Tory initiatives like “levelling up” or “the march of the makers.”
- Historical Context: Previous Conservative industrial policies since 2011 lacked substance, and Labour risks similar failure if job creation and public support falter.
The Financial System’s Role
- Untouched Dominance: The strategy avoids reforming the financial system, which has prioritized short-term profits and speculation since the 1980s, overvaluing sterling, undermining manufacturing, and driving private debt.
- Missed Opportunity: Unlike Joe Biden’s interventionist policies, Labour’s approach sidesteps the City’s influence, limiting efforts to redirect capital toward productive industries.
- Cultural Shift Needed: Industrial renewal requires deep institutional changes, not just policy tweaks, to counter the culture of financial hoarding.
Strategic Implications
- Economic Sovereignty: The focus on advanced niches aligns with the UK’s post-industrial economy, but success hinges on reclaiming economic sovereignty, which the strategy only partially addresses.
- Risks: Without confronting financial dominance, funds may continue flowing into speculative ventures rather than productive sectors, perpetuating economic imbalances.
- Potential: The strategy’s state-led investments and alignment with clean energy goals could drive innovation, but its impact depends on sustained political will and public support.
Conclusion
Labour’s 2025 industrial strategy marks a departure from market-led failures, embracing state intervention in manufacturing and clean energy. However, its reluctance to challenge the financial system’s dominance risks cementing the status quo, limiting the potential for true economic transformation. To succeed, Labour must go beyond funding clean factories and address the cultural and institutional barriers rooted in finance-driven economics.