Industry 
Policy Connect and the Manufacturing Commission, the research arm of the All-Party Parliamentary Manufacturing Group (APMG), have made significant progress in their new inquiry into the Government’s Industrial Strategy published in June 2025. The inquiry explores the vital contribution of SMEs to the UK’s manufacturing sector, in building national resilience and boosting economic growth.
The inquiry has been supported throughout by the APMG and Manufacturing Commission’s chairs, Bill Esterson MP and Lord Bilimoria of Chelsea CBE, DL. Contributions have also been made by Catherine Atkinson MP and Antonia Bance MP, along with representatives from industry, the civil service, and the third sector. The ERA Foundation, a non-profit organisation delivering essential career development in the sector, is sponsoring the inquiry.
An initial evidence session was held in Parliament in October 2025, focussing on SME manufacturers’ access to finance and considering the interventions proposed within the Industrial Strategy.
The session also looked at the proposed expanded mandate of the British Business Bank, including allocation of specialist funds to support the manufacturing sector, and continuation of the Growth Guarantee Scheme for SMEs, providing a 70% guarantee for banks lending to SMEs. Participants in this meeting also called for further incentives to widen lending eligibility, improve digital application routes, and consolidate the financial security of lenders and emerging businesses in the sector.
A second evidence session took place at the University of Derby in November 2025, on the topic of energy costs and sovereign capability. The participating industry stakeholders discussed the proposed British Industrial Competitiveness Scheme, which proposes to reduce electricity costs by £35-£40 per megawatt-hour for energy-intensive industries and exempt them from policy costs such as the Renewables Obligation. Again, SMEs contributing to the inquiry were broadly supportive of this intervention but felt that eligibility for BICS was too narrow in its proposed format, and that further policies to stabilise the already volatile energy market were desperately needed to support their growth.
As the inquiry reaches its halfway point, there has been time for all those involved to reflect on the ambitions of the Industrial Strategy, which seeks to break down barriers to investment, with initiatives to support skills and career development, foster sustainable practice, and encourage domestic supply chain growth. Provided that the Government’s interventions effectively support SMEs, who constitute 99% of the UK’s manufacturing businesses, we see no reason why the Industrial Strategy should not be a long-term success.
A third evidence session is scheduled for January and will be looking at wider support for business, such as support for digitalisation, procurement reform, and the tax landscape. In particular, the meeting will consider the Government’s long-awaited Business Growth Service to help businesses scale up their production, exports, and recruitment.
Following completion of the evidence gathering phase, Policy Connect and the Manufacturing Commission will launch a report in the Spring, presenting the findings of the inquiry and making recommendations to Government. More details for the next steps of this project will be announced in the New Year.
If you would like to attend the final evidence session on 7th January, or if you are interested in attending the Parliamentary launch event in the Spring, please email Rob Allen (robert.allen@policyconnect.org.uk).
Inigo Jones is an MA in Public Policy student at King’s College London School of Politics and Economics. Inigo is currently completing an internship at Policy Connect.
