Plans to cut energy costs for thousands of businesses have been announced as part of the government’s long-awaited industrial strategy.
The announcement confirms Sky News reporting that the plan proposes making energy prices more competitive.
Firms have said high prices have hindered growth and made them less competitive.
Business Secretary Jonathan Reynolds told Sky News the issue of high electricity costs was “one of the biggest things business has asked of the new government”.
Commercial energy prices are the highest in the G7 group of industrialised nations – and Mr Reynolds said “that will fundamentally change with what we’re putting forward today”.
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Under the industrial strategy for 2025 to 2035, the government has said it plans to cut the bills of electricity-intensive manufacturers by up to £40 per megawatt hour – up to 25% – from 2027, which could benefit more than 7,000 businesses.
These savings will come by exempting them from certain levies on bills.
Roughly 500 of the most energy-intensive companies, such as the steel industry, chemicals and glassmaking industries, will also see their network charges cut.
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The current 60% discount they get, via the British Industry Supercharger scheme, will increase to 90% from next year.
The government also said the energy measures would be funded through reforms to the energy system, without raising household bills or taxes.
The scope and eligibility for the scheme will be finalised after a consultation.
Mr Reynolds said it will be a threshold test based on the percentage of a company’s electricity cost as part of your overall output and will be targeted at the businesses which need it the most.
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The policy is the first industrial strategy of its kind in eight years and comes as part of the government’s key priority of growing the economy.
Pressure was on to develop such a policy after the US’s Inflation Reduction Act boosted investment in renewable energy, and the European Union’s Net-Zero Industry Act was designed to boost domestic production.
A “bespoke” 10-year plan has been created for eight sectors where the UK is said to be strong already and there is potential for growth.
The sectors named by the government are advanced manufacturing, clean energy, creative industries, defence, digital and technologies, life sciences, professional and business services, and financial services.
The state-owned British Business Bank will expand to spur investment into smaller companies, and provide an extra £1.2bn a year by 2028-29.
The government also repeated its ambition to cut regulatory burdens, spend more on research and development and speed up the planning process.
Mr Reynolds said: “It means more jobs, more investment in the UK, in a whole range of sectors that are the right thing for the economy, also right for our national resilience and making sure we’ve got that important manufacturing sector alongside a thriving services sector.”
