Industrial Policy & Trade Monitor· 2663 actions· ✨ 89 recent

Innovate UK (part of UKRI) opened the Growth Catalyst - Investor Partnerships Round 2 competition on 10 December 2025, allocating a minimum of £100 million in grant funding to UK-registered SMEs at seed-to-Series-A stage. Grants (60-70% of project costs for feasibility and industrial-research projects; 35-45% for experimental development) must be matched by private investment from an Innovate UK-approved investor partner, ranging from an equal match to double the grant amount depending on project category. Applicants must align with one of the priority sectors named in the UK's Modern Industrial Strategy ("Invest 2035"): advanced manufacturing, clean energy, digital and technologies, defence, creative industries, life sciences, or the Battery Innovation Programme. The competition closes 3 February 2026.

The Department for Business and Trade, with DSIT, published "Vision 2035: Critical Minerals Strategy" on 22 November 2025 — the UK's first dedicated critical-minerals strategy under the Starmer government, superseding the withdrawn 2022 strategy. DBT commits up to GBP 50 million for new critical mineral projects on top of GBP 165 million in existing support, with the National Wealth Fund providing equity backing (Cornish Lithium GBP 24m in 2023 plus a further GBP 31m commitment in 2025; Cornish Metals GBP 28.6m in 2025; South Crofty Tin GBP 26.8m). Sets 2035 targets of 10% of UK industrial demand from domestic production (extraction + processing + refining), 20% from recycling, and a hard floor of 50,000 tonnes lithium carbonate equivalent produced domestically. Strategy is consciously midstream-and-recycling-tilted rather than upstream-extraction race; pillars are (i) optimise domestic production, (ii) resilient global supply networks via partnerships with US, EU, Canada, Australia, Saudi Arabia, India, Japan (plus Kazakhstan rhenium/vanadium and continued China engagement), (iii) circular economy / recycling, (iv) responsible supply chains.

The UK Department of Health and Social Care, delivered via Innovate UK, awarded more than GBP 54 million in government funding across eight R&D projects on 18 November 2025 through the Sustainable Medicines Manufacturing Innovation Programme, matched by more than GBP 20 million from industry (combined GBP 74m+). The programme is funded through the GBP 400 million VPAG Investment Programme, agreed under the 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), and supports the manufacturing pillar of the UK's Modern Industrial Strategy Life Sciences Sector Plan. Funded projects include anaesthetic gas recovery/recycling (targeting ~GBP 5m annual NHS savings), converting spent nuclear fuel into radionuclide cancer therapies, CAR-T cell manufacturing scale-up (Royal Free Hospital), engineered bacteriophages for antibiotic resistance, and an AstraZeneca-led "Sustainable Future Factory" AI/robotics initiative.

On 8 September 2025, the UK Ministry of Defence published the Defence Industrial Strategy 2025 — "Making Defence an Engine for Growth" (CP 1388) — the first comprehensive cabinet-level UK defence industrial strategy in over a decade and the sector plan for Defence under the UK Modern Industrial Strategy umbrella (IS-8). The strategy was published alongside the Strategic Defence Review 2025 and operationalises the largest sustained defence- spending increase since the Cold War (rising to 2.6% of GDP by 2027 with ambition to 3% in the next Parliament). It defines six priority outcomes (growth, backing UK businesses, defence innovation, resilient industrial base, procurement transformation, enduring partnerships); establishes UK Defence Innovation (UKDI) within the MOD with a ringfenced £400m budget to accelerate dual-use technology; identifies priority defence capabilities (combat air, complex weapons, directed-energy weapons, next- generation land and maritime systems) plus dual-use sub-sectors (quantum, drones/autonomy, space, AI, cyber, engineering biology, advanced connectivity); and flags resilience priorities in steel, construction, energetic materials, batteries, semiconductors and rare earths.

The UK Department for Business and Trade, with the Department for Science, Innovation and Technology, published "The UK's Modern Industrial Strategy" (Command Paper CP 1451) on 23 June 2025, laid before Parliament via Written Statement HCWS725. It is the first cross-economy industrial strategy under the Starmer Labour government and replaces the 2017 Industrial Strategy (withdrawn in 2021). It sets a ten-year horizon focused on business investment, productivity and resilience, designates eight priority growth sectors ("IS-8"), and packages instruments including British Business Bank capacity expansion, the National Wealth Fund's GBP 27.8bn envelope, a permanent statutory Industrial Strategy Advisory Council, planning and skills reforms, and sector-specific Sector Plans published alongside.

The UK's state-owned National Wealth Fund (NWF) and UK Export Finance (UKEF), both wholly government-owned, jointly provided financial guarantees covering £272 million each (80% coverage of a £340 million loan facility) to unlock £680 million in commercial-bank financing for AESC's second battery gigafactory ("Plant 2") in Sunderland. The UK's Automotive Transformation Fund separately contributed £150 million in grants. Total investment mobilised exceeds £1 billion. The plant will add 15.8GWh of annual battery-cell capacity, supporting production of up to 100,000 electric vehicles per year and creating over 1,000 direct jobs in North East England.

On 8 May 2025, President Trump and UK Prime Minister Starmer announced the General Terms of the US-UK Economic Prosperity Deal (EPD), the first bilateral framework arrangement of the second Trump administration and the template instrument for subsequent US bilateral framework deals (US-Japan, US-Indonesia, US-Argentina, US-Korea, US-EU). The framework was implemented on 23 June 2025 via Executive Order 14309 (Federal Register doc 2025-11473). Key US concessions: a 100,000-vehicle annual TRQ for UK autos at a 10% combined rate (7.5% + 2.5% MFN, vs. 27.5% Section 232 default); aerospace tariff reduction back to MFN rates; authority delegated to Commerce/USTR to establish UK-only TRQs for steel and aluminum (in lieu of the 50% Section 232 global rate). Key UK concessions: 13,000 mt duty-free beef quota (with 20% tariff removal on the existing 1,000 mt WTO quota); 1.4 billion litre duty-free ethanol quota; commitment to negotiate non-tariff barrier reductions and supply-chain security alignment. The 10% IEEPA "reciprocal" baseline tariff on most other UK goods is preserved by the EPD.