Industrial Strategy Announcement

By Alistair Smout

LONDON (Reuters) – Britain’s industrial strategy made public on Monday will reduce green levies, lowering energy bills for thousands of companies to enhance competitiveness in steel and other manufacturing sectors.

Under the strategy for 2025-2035, the government plans to cut bills for electricity-intensive industries by up to 25% starting in 2027, benefiting more than 7,000 businesses.

The government prioritizes boosting Britain’s sluggish growth. Lawmakers and business leaders cited high energy costs as a major obstacle.

In contrast to the United States, under President Donald Trump, which promotes domestic industry through protectionist measures, Britain and the EU face pressure to support their manufacturers, particularly in light of climate levies.

In response to industry body Make UK’s requests, the government has exempted the most energy-intensive companies from certain climate levies.

The Industrial Strategy continues to emphasize clean energy as one of eight key sectors alongside advanced manufacturing, defense, and the creative industries.

Business Secretary Jonathan Reynolds stated, “Tackling energy costs and fixing skills has been the single biggest ask of us from businesses and the greatest challenge they have faced – this government has listened.”

The energy measures will be funded by reforms to the energy system, ensuring that household bills or taxes will not increase. Scope and eligibility will be finalized after a consultation.

Business and Workers

This is Britain’s first industrial strategy in eight years, with the Labour Party advocating a coordinated approach to assist industries in areas like skills, power, water, and investment.

Prime Minister Keir Starmer and other ministers noted past failures in adequately supporting workers during deindustrialization, as well as concerns about overregulation.

While engineering and business groups welcomed the strategy’s focus on energy costs and skills, the pro-growth group Britain Remade called for reforms to ensure faster grid connections and a streamlined planning process.

The government plans to expand the British Business Bank to increase investment in smaller companies and allocate an additional £1.2 billion ($1.61 billion) annually on skills by 2028-29, while also reducing regulatory burdens.

Manufacturing currently represents less than 9% of the economy. The strategy also includes support for Britain’s creative sector, as well as financial and professional services, though sectors like hospitality criticized it for its narrow focus.

(Note: $1 = 0.7435 pounds)