UK unveils 10-year industrial strategy to slash energy bills and spur growth

In a landmark move to revive British industry and boost long-term economic growth, the government of the United Kingdom has announced a bold new 10-year industrial strategy aimed at cutting energy costs for businesses, unlocking billions in investment, and creating over 1.1 million well-paid jobs by 2035. The strategy, launched on June 23, focuses on eight key sectors ranging from advanced manufacturing and clean energy to digital technologies and financial services where the UK has a global competitive advantage. It pledges to remove barriers to business expansion, accelerate innovation, and support a cleaner, more resilient economy.

Major electricity cost cuts for manufacturing firms

At the heart of the government’s recent plan is a pledge to slash electricity bills by up to 25 per cent for over 7,000 energy-intensive manufacturers from 2027 through a new British Industrial Competitiveness Scheme. Eligible businesses, including those in the automotive, aerospace, chemicals and ceramics sectors, will be exempt from green levies such as the Renewables Obligation and Capacity Market charges, saving up to £40 ($53.5) per megawatt-hour.

Additionally, support will be expanded under the ‘British Industry Supercharger’ for around 500 of the country’s most energy-intensive companies in steel, glass, and chemicals. These companies will see network charge discounts increase from 60 per cent to 90 per cent by 2026, helping protect jobs and enhance global competitiveness without raising household bills or taxes.

Business groups have long cited the extremely high electricity prices as a major obstacle for UK manufacturers, who currently pay some of the highest energy rates in the developed world. The announcement is being seen as a turning point in helping British firms compete with the fast-growing international industry.

Fast-tracking grid access and job creation

The strategy also tackles long delays in connecting new projects to the energy grid, with a ‘Connections Accelerator Service’ set to begin by the end of 2025. This will prioritise investment-heavy and job-creating projects, cutting wait times for grid access.

Prime Minister Keir Starmer hailed the strategy as a “turning point for Britain’s economy”, offering long-term direction and certainty. “This is how we power Britain’s future, by backing sectors where we lead, removing the barriers that hold us back, and building a stronger economy that works for working people,” he said.

Chancellor Rachel Reeves echoed that sentiment, calling it “a giant step forward” for business and innovation. She announced increased funding for the British Business Bank, boosting its capacity to £25.6 billion ($34.26 billion) to support SMEs and high-growth industries.

Boosting skills, R&D and innovation

To address labour shortages, the government will inject £1.2 billion ($1.6 billion) annually by 2028–29 into skills development, including short courses for high-growth sectors like defence engineering and artificial intelligence (AI). Visa reforms will also be introduced to attract elite global talent.

In addition, research and development spending will rise to £22.6 billion ($30.2 billion) annually by the end of the decade, with specific investments in artificial intelligence ($2.67 billion) and advanced manufacturing ($3.74 billion). Regulatory reforms will further clear the way for technologies like biotechnology, autonomous or self-driving vehicles, and clean energy.

Industry leaders have welcomed the initiative. Make UK CEO Stephen Phipson called it a “much-needed step” that addresses the sector’s three major challenges: skills shortages, high energy costs, and limited capital access. The Confederation of British Industry (CBI) described it as a “bedrock for growth”.

Critics, however, questioned the Labour Party’s ability to sustain the plan. Opposition parties said the strategy admits the high cost of achieving net zero and warned that reforms must avoid burdening taxpayers or leaving small businesses behind. But supporters, including the Trades Union Congress, said lower industrial electricity prices are long overdue.

With economic growth faltering—GDP shrank by 0.1 per cent in May—the new strategy represents a significant effort by the UK government to steer the country towards a more competitive, clean, and job-rich future.