Ministers have failed to finalise a plan to cut Britain’s high industrial energy costs ahead of Chancellor Rachel Reeves’ first spending review.
Business Secretary Jonathan Reynolds remains committed to reducing energy costs for eight priority “growth” sectors – including advanced manufacturing, clean energy, digital tech, financial services, life sciences, creative industries, defence, and professional services – as part of a new industrial strategy due later this month.
However, the Treasury has not yet agreed on the structure or funding for such a scheme. No specific budget was allocated in the spending review, meaning money may need to be redirected from other areas.
Reynolds is keen to support other industries, such as the automotive sector. Still, sectors like steel and ceramics – heavy energy users – have already received support under the British Industry Supercharger scheme introduced by the previous government.
Reeves’ review did include £86 billion over four years for research and development, targeted at the growth sectors, along with £2bn for an artificial intelligence action plan and an additional £1.2bn for skills. Reynolds’ department received one of the most generous settlements in Whitehall, with a 5.8% real-terms annual increase.
However, Make UK warned that the industrial strategy will be “fatally flawed” unless energy costs – currently 46% above the global average – are addressed.
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