The UK government has unveiled a comprehensive Industrial Strategy aimed at slashing electricity costs for businesses and boosting the manufacturing sector. This ten-year plan, announced on Monday, 23 June, seeks to address high energy prices and grid connection delays, fostering investment, job creation, and making Britain a more competitive place to do business.
Government unveils ambitious industrial strategy
The UK government has launched a new Industrial Strategy, a ten-year blueprint designed to revitalise British industry. The strategy focuses on tackling two significant barriers to growth: high electricity prices and lengthy delays in grid connections. Prime Minister Keir Starmer hailed the strategy as a "turning point for Britain’s economy," signalling a departure from short-term policies.
Key takeaways
- Electricity bills for over 7,000 electricity-intensive manufacturing businesses are projected to be cut by up to 25% from 2027.
- This will be achieved through exemptions from levies such as the Renewables Obligation, Feed-in Tariffs, and the Capacity Market.
- Around 500 of the most energy-intensive firms, including those in steel, chemicals, and glass, will see their electricity network charge discount increase from 60% to 90% from 2026, via the British Industry Supercharger.
- A new Connections Accelerator Service will be introduced by the end of 2025 to streamline grid access for major investment projects.
- The strategy aims to create 1.1 million new, well-paid jobs over the next decade.
Funding and economic impact
The initiatives will be funded through reforms to the energy system, without increasing household bills or taxes. Additional funds are expected from the strengthening of UK carbon pricing, including a potential link with the EU carbon market. Chancellor Rachel Reeves stated the strategy would inject billions into investment and cutting-edge technology, ease energy costs, and upskill the nation.
Sector-specific plans
The Industrial Strategy targets eight key sectors where the UK demonstrates strong potential for growth:
- Advanced Manufacturing: Backed by up to £4.3 billion in funding, including £2.8 billion for R&D over the next five years, to anchor supply chains.
- Clean Energy Industries: Investment to double by 2035, with Great British Energy supporting the clean power revolution.
- Creative Industries: A £380 million boost for film, TV, video games, advertising, music, and arts.
- Digital and Technologies: Over £2 billion for the AI Action Plan, including a new Sovereign AI Programme and £187 million for tech skills training.
- Professional and Business Services: Aims to make the UK the world’s most trusted adviser to global industry, leveraging UK-grown AI.
Plans for Defence, Financial Services, and Life Sciences sectors are expected to be published shortly.
Industry reaction
Industry leaders have largely welcomed the announcement. Rain Newton-Smith, Chief Executive of the CBI, praised the strategy as a "significant leap forward" for government-business partnership. Stephen Phipson CBE, CEO of Make UK, highlighted the strategy’s focus on addressing long-standing challenges such as skills shortages, high energy costs, and access to capital. Mike Hawes OBE, SMMT Chief Executive, emphasised the critical need for swift implementation, particularly regarding energy costs, to maintain the UK automotive sector’s global competitiveness.
Sources
- Powering Britain’s Future – GOV.UK, GOV.UK.
- Powering Britain’s future: Electricity bills to be slashed for over 7,000 businesses in major industry
shake-up, GOV.UK. - Plans to cut energy costs for thousands of businesses announced | Money News, Sky News.
- UK to cut green levies on businesses in bid to reduce energy costs and boost manufacturing | Manufacturing
sector, The Guardian.
