Powering industrial strategy

Described as a 10-year plan to promote business investment and growth and make it quicker, easier and cheaper to do business in the UK, it focuses on eight sectors where the UK is already strong and there’s potential for faster growth: advanced manufacturing; clean energy industries; creative industries; defence, digital and technologies; financial services; life sciences; and professional and business services.

One of the most eye-catching policies in the strategy is the reduction of energy costs for major electricity users. According to the Government, More than 7000 businesses in manufacturing sectors such as automotive, aerospace and chemicals are set to see their electricity bills slashed by up to 25% – but not until 2027. These firms, which support over 300,000 skilled jobs, will be exempt from paying levies such as the renewables obligation, feed-in tariffs and the capacity market. The intention is to help level the playing field and make them more internationally competitive. 

There will also be increased support for the most energy-intensive businesses – for example steel, chemicals, and glass – by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger. These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%.

While these measures are undoubtedly welcome, they do seem to be somewhat in conflict with any sustainability ambitions. While I appreciate that making electricity cheaper is vital for growth and competition, I can’t help thinking that it will also have a detrimental impact on the drive for efficiency. Then there’s the fact that these price cutting measures are not due to come in for another couple of years, plus the fragile geopolitical situation that continues to push global energy prices higher. So however positive the measures are, they do not provide an instant cure-all.

Commenting, on the strategy and its promised cuts in electricty costs, Barbara Frei, executive VP, industrial automation at Schneider Electric, said: "As global energy prices remain volatile, industrial firms face mounting pressure to protect margins. But the solution isn’t simply to wait for prices to fall. The real opportunity lies in redefining cost competitiveness through smarter resource management and automation.

"To stay globally competitive, the UK’s industrial companies must go beyond traditional cost-cutting. They need to embrace open software-defined automation and industrial AI. Not as future investments, but as immediate strategic imperatives. These technologies are already delivering measurable gains in productivity, efficiency and emissions reduction across global markets."

And that is a message that is well worth listening to.