Energy costs for high growth sectors to be slashed under 10-year industrial strategy

The government has pledged to lower energy costs for key sectors including steel and life sciences as part of its new industrial strategy.

Published this morning, the 10-year plan seeks to reduce energy bills for industries in the UK, which are some of the highest in the developed world.

The Department for Business and Trade said the strategy will help to “create the most favourable conditions in key UK sectors for the companies of the future to emerge here”, including those which play a key role in the clean energy transition.

The strategy aims to cut energy costs in sectors including steel by as 25% from 2027

It is backing eight sectors with the “highest potential” with new exemptions from certain extra charges levied at firms that are used to support green energy, which the government said could cut costs by up to 25% from 2027.

Around 500 energy intensive manufacturers including steel makers will also have their discounts for network charges increased from 60% to 90%.

Prime minister Keir Starmer said the strategy “marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past”.

He added: “This is how we power Britain’s future - by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people.”

Other elements of the strategy include reducing the administrative costs of regulation for businesses by 25%, reducing the number of regulators and reforming visa rules to make it easier to attract skills in key sectors from overseas.

A new £600m ‘strategic sites accelerator’ will also choose six locations across the UK for enhanced funding support aiming to increase the number of investable industrial sites.

Meanwhile, new planning powers currently before Parliament in the Planning and Infrastructure Bill are seeking to speed up grid connections for strategically important projects.

CBI chief executive Rain Newton-Smith said the strategy was a “significant leap forward in the partnership between government and business”.

“More competitive energy prices, fast-tracked planning decisions and backing innovation will provide a bedrock for growth. But the global race to attract investment will require a laser-like and unwavering focus on the UK’s overall competitiveness”, Newton-Smith said.

Civil Engineering Contractors Association Midlands director Lorraine Gregory said the strategy provided “renewed confidence that government understands the fundamental role civil engineering contractors will play in unlocking opportunity, improving resilience, and delivering sustainable growth across all regions of the UK”.

Mark Smith, managing director at innovation consultancy Ayming UK, said the government was right to prioritise high growth sectors but urged the government to move faster.

“The strategy is full of positive ideas and ambition, but we ultimately need to speed up the pace of delivery. This can only be achieved by greater coordination, not just across Whitehall departments, but also between national and regional governments,” he said.

The industrial strategy follows the publication of the government’s 10-year infrastructure strategy, published last week, which has set out a framework for how £725bn will be spent over the next decade on infrastructure projects.