Government Unveils 10-Year Industrial Strategy with Focus on Lowering Energy Costs for Businesses

The UK government is set to launch a comprehensive 10-year industrial strategy aimed at boosting economic growth, cutting business energy costs, and supporting innovation across key sectors.

A central feature of the plan includes exempting more than 7,000 manufacturing businesses from certain green energy levies, potentially reducing their electricity bills by up to 25%.

Prime Minister Sir Keir Starmer described the initiative as “a turning point for Britain’s economy,” emphasizing its goal of providing long-term certainty for businesses to invest, innovate, and create well-paying jobs. The strategy is scheduled to be officially announced on Monday and comes amid concerns over sluggish economic growth, with GDP shrinking by 0.3% in April.

At the heart of the plan is the new British Industrial Competitiveness Scheme, which will lower energy costs by up to £40 per megawatt-hour for eligible firms starting in 2027. The policy aims to address the fact that UK manufacturers currently pay some of the highest energy prices in the developed world. Around 500 of the most energy-intensive companies, such as those in the steel, chemicals, and glass sectors, will also see their network charge discounts increase from 60% to 90% under an expanded British Industry Supercharger Scheme beginning in 2026.

Specific eligibility requirements for the new schemes will be determined following a two-year consultation period.

The industrial strategy also outlines several broader initiatives:

• Skills Development: An additional £1.2 billion per year will be allocated to workforce training by 2028–29 to reduce reliance on foreign labor.

• Talent Attraction: Visa and migration reforms aim to draw top international talent to the UK.

• Planning Reforms: The hiring of more planners and streamlining of application processes to accelerate industrial project approvals.

• Innovation Investment: Increased research and development funding, reaching £22.6 billion annually by 2029–30, including £2 billion earmarked for artificial intelligence.

The government will focus on eight high-potential growth sectors: advanced manufacturing, clean energy, creative industries, defence, digital technology, financial services, life sciences, and professional and business services. Sector-specific 10-year strategies will be released Monday for five of these, while plans for the defence, financial services, and life sciences sectors are expected at a later date.

Reactions to the plan have been mixed. Business groups, including Make UK, welcomed the focus on addressing key industrial challenges—energy costs, skills shortages, and access to capital. Chief Executive Stephen Phipson called the strategy a significant step in improving British industry’s competitiveness.

Trade unions have also responded positively. Paul Nowak, General Secretary of the Trades Union Congress (TUC), noted that high energy costs have long hampered UK manufacturers compared to counterparts in France and Germany.

However, criticism came from opposition parties. Acting shadow energy secretary Andrew Bowie questioned the strategy’s effectiveness, arguing that the need to subsidize energy bills highlights the high cost of pursuing net-zero goals. Liberal Democrat business spokesperson Sarah Olney also stressed the importance of ensuring small businesses benefit from the measures.

The Prime Minister positioned the new strategy as a break from past approaches, calling it “robust, strategic, and unapologetically long-term.” In a commentary published in the Financial Times, he said the plan aims to redefine the relationship between government and business and represents a move from “fixing inherited problems to delivering change and renewal people can feel.”

With input from BBC and the Financial Times.