UK industrial strategy must deal with high energy costs, business warns

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Prime Minister Sir Kerr Starmer has been warned by the British business that his explosive industrial strategy, which will be published this month, will be “fatal defective” unless it works comprehensively with the very high energy costs in the country.

The ministers accept that the high energy costs – which claim manufacturers are 46 percent higher than the global average – must be addressed in the industrial strategy, according to government officials.

But business groups are afraid that the government will be very shy, as it aims to help in the most intense energy sectors-such as steel and ceramic-instead of a wide range of companies that struggle with energy bills.

The ministers are looking to increase the generosity of the “British Al -Shahan” plan, which was established by the Rishi Sonak government in April 2024, which reduced bills of 370 energy companies, according to the people who were informed of the plans.

“Unless the industrial strategy provides a solution to the high energy costs of the UK industry, it will fail,” Ryan Newton Smith, General Manager of the CBI Labor Union, told the Financial Times.

Newton Smith said that a “more comprehensive” solution should be found instead of focusing only on the largest energy users, adding that the chemical, space and cars industries were among those with high energy bills.

Meanwhile, the Lobby Group for Manufacturing said that the costs of industrial energy in Britain were four times the highest in the United States and 46 percent above the global average.

She said: “The upcoming industrial strategy will be deadly defective unless high -sky energy costs are addressed.”

Starmer’s industrial strategy determines eight “growth” sectors: advanced manufacturing, clean energy, creative industries, defense, digital and technologies, financial services, life sciences, professional services and commercial services.

“Johnny said it is always something that appears. It is alive to the fact that the industrial strategy needs to obtain some good answers to energy,” said officials close to business minister Jonathan Reynolds.

Industry officials who have seen government thinking expect the ministers to take a more generous approach to the British charger, which the Sonak government said will provide intense energy users, such as steel makers, about 410 million pounds in 2025.

They said that the ministers were looking to increase network fees for qualified companies from 60 percent to approach the 90 percent compensation provided by France and Germany to industrial users for these network fees.

But business groups want to distribute energy bills on a larger scale, including by removing fees such as “Renewable Energy Sources” and “Climate Change Tax” from invoices.

“If we do not address the issue of high industrial energy costs as a priority, we risk the security of our country,” said Stephen Fibson, CEO of the United Kingdom.

“The Nissan Sunderland Factory has the highest energy costs in all Nissan factories all over the world,” said Alan Johnson, the first vice president in the Japanese auto industry.

The industrial strategy is scheduled to be published almost at the same time with a review of the comprehensive spending of the Ministry of Treasury on June 11.

The Ministry of Business and Trade refused to comment on “speculation” on the contents of the strategy.