The UK government has unveiled a new Industrial Strategy, aiming to tackle two significant challenges facing British industry: high electricity prices and lengthy grid connection waits. From 2027, over 7,000 electricity-intensive businesses will see their electricity bills reduced by up to 25%, with savings of up to £40 per megawatt hour. This initiative targets manufacturing sectors such as automotive, aerospace, and chemicals, which collectively support over 300,000 skilled jobs.
The British Industrial Competitiveness Scheme will exempt these firms from paying certain levies, including the Renewables Obligation, Feed-in Tariffs, and the Capacity Market. This move is designed to level the playing field and enhance their international competitiveness. Additionally, the government will increase support for the most energy-intensive industries, such as steel, chemicals, and glass, by covering 90% of their electricity network charges from 2026, up from the current 60%. This will benefit around 500 eligible businesses, helping to reduce costs and protect jobs.
To facilitate business growth and hiring, the government will introduce a new Connections Accelerator Service by the end of 2025. This service aims to streamline grid access for major investment projects, prioritising those that create high-quality jobs and deliver significant economic benefits. The government will collaborate with the energy sector, local authorities, Welsh and Scottish governments, trade unions, and industry to design this service.
New powers in the Planning and Infrastructure Bill, currently before Parliament, could allow the government to reserve grid capacity for strategically important projects. This could cut waiting times and unlock growth in key sectors. Prime Minister Keir Starmer described the Industrial Strategy as a turning point for Britain’s economy, providing the long-term certainty and direction needed for businesses to invest, innovate, and create good jobs.
Energy Secretary Ed Miliband highlighted the impact of high electricity costs on British businesses, attributing it to reliance on gas sold on volatile international markets. He emphasised the government’s commitment to slashing industrial electricity prices in key sectors and investing in clean power strengths, such as offshore wind and nuclear. This strategy aligns with the government’s clean power mission and Plan for Change, aiming to bring down bills for households and businesses.
The new Industrial Strategy could significantly reshape the UK’s energy and manufacturing sectors. By reducing electricity costs and streamlining grid connections, the government aims to enhance the competitiveness of British industries on the global stage. This could lead to increased investment, job creation, and innovation in key sectors. However, the strategy’s success will depend on effective implementation and collaboration with various stakeholders. The reforms also raise questions about the balance between supporting energy-intensive industries and promoting clean energy transitions. As the strategy unfolds, it will be crucial to monitor its impact on both industrial competitiveness and environmental sustainability.