The UK government’s new ten-year industrial strategy aims to significantly reduce energy costs for thousands of businesses, centralizing its approach by proposing the removal of green levies. Prime Minister Sir Keir Starmer announced this strategy as part of a broader initiative intended to foster growth in key industries and potentially slash energy bills by as much as 25% for over 7,000 companies across the UK. This ambitious announcement is expected to be revealed on Monday, propelling discussions around the future of energy policy in the UK.
Starmer framed the industrial strategy as a pivotal moment for the British economy, emphasizing that it will inject support into sectors with substantial growth potential. The government’s focus on decreasing energy expenses is particularly timely as manufacturers in the UK currently contend with some of the highest electricity prices among developed nations. In statements made by Conservative acting shadow energy secretary Andrew Bowie, he criticized the Labour plan by calling for a more robust energy policy that addresses the root causes behind high prices, indicating concerns about the financial implications of the green levies.
Acknowledging the enormous pressure businesses face, Bowie stated that it was remarkable the Labour party was now recognizing the severe financial burdens imposed by net-zero policies which compel substantial taxpayer funding to keep businesses afloat. Under the proposed strategy, manufacturers will benefit from a new British Industrial Competitiveness Scheme. This initiative is set to exempt approximately 7,000 manufacturing firms from certain levies, with anticipated savings of up to £40 per megawatt-hour by the year 2027. Moreover, around 500 high-energy firms, including sectors such as steel, chemicals, and glassmaking, will see substantial cuts in their network charges.
The industrial strategy features provisions to enhance the connection speed of new factories and projects to the energy grid, providing businesses with the stability and direction they need to forge ahead with innovation and job creation. Starmer emphasized the goal of the plan is to create over a million well-paid jobs over the ensuing decade as it endeavors to balance immediate energy affordability with long-term economic growth.
Further items in the industrial strategy include a commitment to invest an additional £1.2 billion annually until 2028-29 to upskill the UK workforce while reducing dependency on foreign labor. To invite elite global talents to the UK, there will be reforms in visa and migration policies. The initiative also proposes hiring more planners and expediting application processes, which could lessen planning duration and reduce expenses for developers.
Additionally, research and development funding is slated to increase substantially, targeting £22.6 billion per year by 2029-30—allocated significantly toward advancements in artificial intelligence. The government has earmarked eight sectors conducive to rapid growth based on the UK’s existing strengths; these sectors include advanced manufacturing, clean energy, creative industries, and more.
As anticipation hovers over the impending publication of tailored ten-year plans for five of the eight sectors, the financial services, life sciences, and defense strategies are expected to follow later. This announcement arrives amidst recent statistics indicating that the UK economy experienced a 0.3% contraction in April, marking a notable downturn in economic performance over recent months.
There are voices from various sectors acknowledging potential benefits stemming from the new strategy. Manufacturers’ organization Make UK views it as a well-rounded approach to tackle critical issues like a skills crisis and energy costs. Conversely, Paul Nowak from the Trades Union Congress lauded efforts to address high energy costs afflicting UK industries, remarking on the challenges posed by competitive energy pricing in Europe.
Nevertheless, Liberal Democrat spokesperson Sarah Olney stressed that the government’s proposals must deliver realistic solutions aimed at alleviating rising energy costs and uplifting workforce capabilities, urging that small businesses be central to the scheme. Overall, the impending plans are keenly awaited as they represent an essential pivot towards a forward-thinking economic strategy, set against a backdrop of challenging market dynamics.