Britain is investing billions in energy. Can it rebuild our industry?

Britain has deindustrialised more than any other developed nation. The energy transition, the largest industrial demand signal this country will generate for decades, offers a chance to reverse that trend. The question is whether we take it.

In this first episode, I explore why Britain has become world-class at deploying energy infrastructure but consistently fails to capture the industrial value that comes with it. From the offshore wind content gap to the stop-start history of British industrial strategy, I make the case that energy is not just a climate or technology story. It is the cause and the cure for Britain’s deindustrialisation.

This is the first in a three-part series on the energy transition, from a broader podcast that will focus on energy, infrastructure, and industry. 

Transcript

Why Energy Shapes Industry

SPEAKER_00 0:00

Welcome to How We Build Britain, a podcast about energy, infrastructure and industry. I'm Rob Gilbert. I've spent my career at the intersection of energy, industry and investment, asking why Britain, once the workshop of the world, now so often treats its industrial base as an afterthought. The UK has deindustrialized more than any other developed nation. Whether we choose to deliberately reverse that trend will shape our economy, our security and our society, and the cost of inaction is becoming impossible to ignore. We're starting with energy, because it's the lifeblood of any industrial system, and something that the UK should be celebrating as an industrial success story, but currently can't. This is the first in a three part series exploring why the energy transition matters for industry and how getting the connection right might be the most important economic question Britain faces today. This episode is about the problem, why Britain has become so good at deploying capital on energy infrastructure and so bad at building industry around it. Episode two looks at what we need to do differently, making choices, concentrating investment and learning from countries that have demonstrated long-term commitment delivers world leading industrial results. Episode three is about the broader consequences, the capabilities in steel, chemicals and polymers that quietly underpin modern life and which are disappearing from the UK industrial landscape at a rate that should concern us all. Once lost, they will not come back easily. Together, those three episodes make a single case. The energy transition is the largest industrial demand signal this

A Personal Lesson In Offshoring

SPEAKER_00 1:55

country will generate for decades. Whether it rebuilds Britain's industrial capability or someone else's is a choice we have to make right now. After that, the series opens up. I'll be talking to people working at the sharp end of this question, policy makers, investors, industrialists, and I'll be travelling around the country, visiting the places where this is real. The ports, the factories, the yards, and the communities, whose futures depend on getting this right. Because this isn't just an argument about economics, it's about place, production, pride, and potential. I want to start with something personal. Why I care about industry. My first job was in the textile industry in North Nottinghamshire. I was there when some of the last remnants of British manufacturing capability in that sector were offshore, and I was part of it, working in Southeast Asia as we exported generations of British industrial knowledge. It was a jarring experience. On one side I watched investment flow into Cambodia and India lifting living standards in real time, and it was extraordinary to see. On the other, I watched a community lose its principal employer, the curtain call on a manufacturing legacy in the Midlands that stretched back over a century. That experience has shaped how I think about industry. Not as an abstraction, not as a line on a GDP chart, but as something that is either present in a place or it isn't. And when it goes, it doesn't come back easily. I've spent the best part of two decades since working across supply chain and investment, mostly in the energy sector. And the question that has followed me through all of this is why don't we value our industry in the way that other countries do? Today I work at Great British Energy, where I lead the supply chain program. That work has given me a front row seat to both the scale of opportunity and the difficulty of turning ambition into industrial reality. It reinforces everything I've seen throughout my career. But this series is not a great British energy production. The arguments here are my own, drawn from a career spent across the public and private sectors and from a conviction that these questions deserve a longer, more honest conversation than they usually get.

Britain’s Repeating Energy Pattern

SPEAKER_00 4:26

The relationship between energy and industrial strength is a recurring pattern of British economic history. Coal and steam didn't just power the first industrial revolution, they created entire industries, iron, textiles, railways. The communities that grew around the coal fields became the backbone of a national economy. Electrification did the same. It built new industries in steel, chemicals and engineering. North Sea oil generated enormous revenues, but it didn't leave behind the lasting industrial base that it might have done in the way that Norway has deliberately achieved. Each of these energy transitions created an industrial opportunity. The question has always been whether it was used deliberately or allowed to pass. And the honest answer is that we have been getting worse at answering that question over time. The honest answer is that we've been getting worse at it over time. Even in the time that I've been working, manufacturing share of GDP has fallen by 40%, from 14% to 8.6% today. Between 2000 and 2022, Britain's share of global manufacturing exports collapsed from 3.7% to 1.5%. No other G7 country has lost ground so completely in exports, in employment, or in industrial investment. These are not abstract numbers. They show up in stagnant wages, deep regional disparities, and a persistently widening trade deficit.

Offshore Wind Value Leaves The UK

SPEAKER_00 6:02

Which brings us to where we are now. Britain is investing in building a new energy system, and we really should. The events of recent weeks are a reminder of what energy dependency actually costs. We need more offshore wind, more grid infrastructure, more nuclear, more hydrogen, and more of the foundational industries that underpin them all. The steel, the composites, the chemicals, and the engineering services. This investment should be great news for industry, because like coal, electrification and North Sea oil before it, this is the most powerful industrial demand signal that the country will generate for decades. But this question of whether the investment rebuilds British industrial capability or whether we repeat the pattern, deploy the capital, and import the capability is critical. Take offshore wind, Britain's flagship success story in the energy transition. And in many respects it genuinely is. We have built a world class market at extraordinary speed and scale, but look at where the value sits. UK content in offshore wind sits at around 48%. The sector deal target was 60% by 2030. That gap represents billions of pounds of industrial value created by British energy policy, but captured by somebody else's industrial base. The high value manufacturing, the turbine systems and advanced components are still overwhelmingly produced abroad. What we do well in this country is installation and operations. That's important work and it's high value work, but it's not the same as making things. We have designed a market that would deliver the cheapest megawatt hour. And it's done exactly that. It's deployed capital at extraordinary scale, but it was not designed to build an industrial ecosystem around that deployment. And so it hasn't. That's not a coincidence or a failure of ambition. It is a predictable consequence of optimizing for price rather than for capability.

Markets Alone Do Not Build Capability

SPEAKER_00 8:08

If we want different outcomes, we need to design for them. There is a respectable argument that says get the market framework right and industry will follow. Set the right price signals, remove the barriers, let capital allocate efficiently. That argument's not wrong. Market design matters enormously, but the evidence of the last forty years suggests that it's necessary but not sufficient. The countries that have built durable industrial strength didn't just get the market right, they made deliberate choices about where they wanted to win and then they used every tool available to make it happen. Britain's institutional instinct runs the other way. We default to market mechanisms because active industrial choices feel like picking winners, and picking winners feels like the kind of thing that ends badly. That instinct has deep roots, and it's not irrational. We have seen industrial policy fail, but we've also, more quietly, seen the absence of industrial policy fail, and the cost of that second failure is written in every statistic I've described. The alternative means shaping supply as well as demand. It means providing long-term pipeline visibility that allows investors to build factories, not just support bids into a contract round. And where appropriate, it means demonstrating national interest deliberately, ensuring taxpayers share in both the risk and the reward to develop the future industrial champions we need. That approach is not protectionism, it is pragmatism. The United States has had Biden's Inflation Reduction Act and now Trump's tariffs, Europe is likely to have the Industrial Accelerator Act, China has been doing this in one form or the other for decades. Each has recognised that markets do not automatically deliver strategic outcomes. Strategic outcomes require strategic intent. There are signs that Britain is beginning to recognise this too. The creation of Great British Energy, the National Wealth Fund and a renewed industrial strategy all signal a shift. Public capital is starting to be deployed more deliberately alongside private investment, backing the businesses that could become the industrial champions this country needs. It matters, but intent without persistence is the pattern we've seen before. And I should be clear, this is not a single party political problem. It is an issue that spans forty years and every shade of government. Labour, conservative, coalition, each one has launched an industrial strategy,

Choosing Partners For Long Term Strength

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each one has let the previous one lapse. This is an institutional failure, not a partisan one, and fixing it will require a commitment that outlasts any single parliament. So what does breaking that pattern actually look like? It looks like making hard choices, choices about who to partner with, on what terms, and whether the goal is short-term capital or long-term capability. Those choices are being made right now in the offshore wind supply chain. Decisions about which countries supply turbine components, which partnerships genuinely transfer manufacturing knowledge, and which simply create new dependencies. Not everyone will agree with how those choices are being made. Some will look at investment turned away and see lost opportunity, especially in the communities that have been waiting a long time for this kind of commitment. And I understand that reaction. But building industrial strength is not the same as accepting every offer that arrives. It requires deliberate choices about who to build with and whether those partnerships create lasting domestic capability. That tension between accepting capital and choosing the right partners for the long term is exactly the argument that this series is making. Not investment at any cost, not protectionism, but strategic intent to rebuild Britain's industry to allow us to trade more freely and openly on the global market and not be dependent on foreign investment as the principal mechanism of delivering our industrial growth.

What Comes Next In The Series

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So here is where I land. Britain is not short of ambition or investment in the energy transition. The demand is real, the capital is flowing, the policy intent is serious, but demand alone is not enough. We have proved we can build world class markets. The harder task, and the one we haven't solved yet, is ensuring that market scale translates into durable industrial capability, and that is what this series is about. In the next episode, I want to look at the countries that have done this well Denmark, Taiwan, South Korea, and ask what it actually takes to build industries that last. Because the answer isn't doing more of everything. It's about making better choices, about where to concentrate. The countries that have got this right didn't try to win everything. They chose where to win and then they committed. The question of how you choose and what you're willing to give up is where we go next. I'm Rob Gilbert. This is how we build Britain. Thank you.