A new 10-year industrial strategy, set for unveiling on Monday, will prioritize reducing energy costs for UK businesses. The plan aims to cut energy bills by up to 25% for over 7,000 companies.
Prime Minister Sir Keir Starmer described the strategy as a pivotal moment for the British economy, emphasizing support for high-growth potential sectors.
However, Conservative shadow energy secretary Andrew Bowie criticized the proposal, asserting the need for a comprehensive energy policy addressing the root causes of high energy prices. He described Labour’s approach as astonishing, suggesting it implicitly acknowledges the substantial costs of net-zero initiatives.
The strategy includes a British Industrial Competitiveness Scheme, reducing costs by up to £40 per megawatt-hour from 2027 for over 7,000 manufacturers. This will be achieved by exempting them from levies such as the renewables obligation, feed-in tariffs, and the capacity market.
Furthermore, approximately 500 energy-intensive firms will see network charge reductions, increasing the existing discount from 60% to 90% by 2026. The strategy also aims to streamline the energy grid connection process for new projects.
The Prime Minister stated the strategy provides businesses with long-term certainty, encouraging investment, innovation, and job creation. The government anticipates the creation of over one million new, well-paid jobs within the next decade.
The strategy focuses on eight key sectors: advanced manufacturing, clean energy, creative industries, defense, digital technologies, financial services, life sciences, and professional/business services. Dedicated 10-year plans for five of these sectors will be released on Monday, with others following.
This announcement follows recent economic data revealing a 0.3% contraction in the UK economy during April—its worst performance in 18 months. Concerns regarding the government’s Employment Rights Bill’s potential impact on growth have also been raised by business groups.
Chancellor Rachel Reeves highlighted the strategy’s investment in cutting-edge technology, energy cost reductions, and national upskilling initiatives. Make UK’s CEO, Stephen Phipson, praised the strategy for addressing key industry challenges: skills shortages, high energy costs, and access to capital.
The TUC’s Paul Nowak and Liberal Democrat’s Sarah Olney also welcomed the focus on energy costs, emphasizing the need for comprehensive solutions and support for small businesses. The announcement comes amid ongoing economic uncertainty.
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