CMA Responds to Government Correspondence on Economic Growth and Industrial Strategy
CMA’s Response to the UK Government’s Industrial Strategy Green Paper
On January 13, 2025, the Competition and Markets Authority (CMA) released a letter responding to correspondence from the Prime Minister, the Chancellor of the Exchequer, and the Secretary of State for Business and Trade. This response follows the UK Government’s launch of the Industrial Strategy Green Paper, “Invest 2035: The UK’s Modern Industrial Strategy,” on October 14, 2024.
CMA’s Role in Promoting Economic Growth
The CMA, led by Chief Executive Sarah Cardell, has outlined its commitment to supporting the government’s industrial strategy. Cardell emphasized that the CMA will advise the government to ensure policies, investment support, and procurement processes harness the power of competition.
Additionally, the CMA will use its powers to promote open, competitive markets, particularly in eight key growth-driving sectors: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.
Economic and Industry Implications
The CMA’s approach is designed to balance competition with other policy objectives, recognizing that competition alone is not sufficient to drive investment.
It highlights the need for access to skilled workers, quality infrastructure, policy certainty, and clear and proportionate regulation to foster economic growth.
Statistics and Implementation Details
- The CMA will launch a review of its approach to mergers remedies in early 2025.
- The Industrial Strategy Green Paper sets out a ten-year plan to drive economic growth.
- The CMA supports the government’s strategic focus on eight key sectors.
Leadership Response
The CMA considers that competition plays a significant role in promoting investment, but it notes that competition is not sufficient on its own to drive investment.
Sarah Cardell, Chief Executive of the Competition and Markets Authority.
The quote underscores the CMA’s nuanced approach to economic growth, acknowledging the interplay between competition and other critical factors such as infrastructure and policy certainty.
Progress and Targets
- The CMA’s 2024/2025 Annual Plan emphasizes promoting competitive markets and tackling unfair behavior.
- The plan includes a new focus on digital markets under the Digital Markets, Competition and Consumers Bill.
- The CMA aims to deliver favourable outcomes for people, businesses, and the UK economy in a volatile and technologically disruptive environment.
Local and Sector-Specific Impact
The CMA’s strategies are expected to have significant impacts across various sectors, particularly in advanced manufacturing and clean energy industries.
For instance, the focus on clean energy could lead to increased investment in renewable technologies, driving regional economic growth and job creation.
Immediate Implications
The CMA’s response and the government’s industrial strategy signal a coordinated effort to stimulate economic growth and innovation.
This alignment is crucial for creating a pro-business environment and addressing the challenges posed by a volatile economic landscape.
Broader Significance
The CMA’s proactive stance on promoting competition and supporting the government’s industrial strategy sets a positive tone for the UK’s economic future.
It underscores the importance of balanced regulatory policies in fostering growth and innovation across key sectors.