top of page
Membership
Events
Family Business Insights
News

Subscribe to our newsletter

Industrial Strategy Flawed Unless Energy Costs Tackled


Manufacturers warn that upcoming Industrial Strategy will be fatally flawed unless sky-high energy costs are tackled

1. Industrial energy costs in the UK are currently four times as high as the US and 46% above global average

2. Ministers should remove regressive policy levies from energy bills to slash costs

3. And create a fixed electricity price to put British manufacturers on a level playing field with international competitors

4. Upcoming Industrial Strategy needs to address this fundamental domestic weakness if it is going to stimulate economic growth

Key findings:

1. To unleash UK manufacturing’s full potential in driving growth, and commit to electrifying industry, Government must urgently reform the unfair policy levies that make low-carbon energy more expensive than fossil fuels.

2. One of the main reasons for high electricity prices for UK industry - compared to European counterparts is the decision to place most policy levies directly onto electricity bills.

3. Removing the policy levies would cut energy costs for manufacturers by 15%.

4. Government would agree a fixed price for manufacturing (a Contract for Difference) If the

GB wholesale price went above the fixed price, government would pay manufacturers and subsidise their energy costs. If it went below the fixed price, manufacturers would pay back the difference to Government.

5. Britain’s manufacturers are today calling on the Government to commit to cutting industrial energy costs as part of its long-awaited Industrial Strategy, allowing manufacturing to grow to its full potential and avoid a looming period of de-industrialisation.

Make UK has made it clear that an ambitious and effective industrial strategy is not optional. It is essential to ensuring the UK remains competitive, secure, and economically productive in the coming years. For that strategy to make the impact manufacturers across Britain desperately need, it must address the energy crisis that leaves firms at a massive competitive disadvantage. With industrial energy prices four times those in the US and 46% above the global average, the Government must act now.

A new report, Tackling Industrial Energy Costs, published today by Make UK sets out solutions which the Government should place at the heart of the strategy, which are both deliverable and costed. In particular it urges Government urgently to reform the complex and unfair policy levies that make low-carbon energy more expensive than fossil fuels.

These costly policy levies are currently applied only to UK industrial bills and not across the rest of Europe. Making this change would cut energy costs by 15% immediately. If coupled with an agreed a fixed energy price for Britian’s manufacturers, the resulting cost reduction would be significant. Both sides would take risk here. Government would pay manufacturers the difference if the cost of energy went above the agreed “strike” price, with manufacturers paying Government if the cost of energy fell lower than the agreed fixed rate.

Make UK recommends that the electricity price £56/MWH which equates to a 10% reduction in retail prices paid by manufacturers. When the savings are added to those gained by removing the policy levies from bills, UK manufacturers would be on a par with European industrial energy bills.

Stephen Phipson, CEO Make UK said:

“If we do not address the issue of high industrial energy costs in the UK as a priority, we risk the security of our country. We will fail to attract investment in the manufacturing sector and will rapidly enter a phase of renewed de-industrialisation."

UK manufacturers have faced energy prices far above those of European competitors for many years, undermining their ability to invest, grow, and compete globally.

More inaction risks compounding this disadvantage and forcing the government to make difficult choices over costly bailouts) or managed decline of the UK manufacturing sector.

Today we have set out a clear package of deliverable, sensible, and popular policies to tackle this issue with the urgency it requires.”

Alan Johnson, Senior Vice President for Manufacturing, Supply Chain and Purchasing AMIEO, Nissan Motor Corp. said:

“The Nissan Sunderland manufacturing plant has the highest energy costs of all Nissan plants across the globe. The proposals being put forward by Make UK - under the umbrella of a new Industrial Strategy - would send a strong message to investors that the UK remains committed to creating a more competitive environment for electric vehicle manufacturing.”


Most Read Articles
Solid Results For Danish Bakery
Linda Andrews - Editorial Assistant, Family Business United
Economics Needs A Radical Reset To Become Truly Sustainable
Paul Andrews - Founder & CEO, Family Business United
Happy Employee Ownership Day 2025
Alex Bloom - Partner, Telos Partners
Funding Crunch Forces A Third Of UK SMEs To Pause Expansion
Paul Andrews - Founder & CEO, Family Business United
St Austell Brewery Delivers Year Of Growth And Unveils Major Rebrand
Paul Andrews - Founder & CEO, Family Business United
Business Booming For Midlands Builder On First birthday
Paul Andrews - Founder & CEO, Family Business United
Untitled design copy (8) copy (4) copy-Medium-Quality (1).jpg

Subscribe to our newsletter

SIGN UP AND JOIN NOW!

FBU continues to expand and has a growing membership base around the world. Recognised as THE family business champions we have also gained recognition in both of the Top 100 Global Family Business Influencers list compiled by Family Capital. We are also the VOICE of the family business community, celebrating their contribution throughout the UK and beyond.

MA_logo_Accelerators_black.png
axiom-logo.png
BM_LOGO_PRIMARY_BLACK_RGB (1).png
western-pension-solution-logo.png
TYWD Logo_Gold & Blue Centered.png
Forsters-new.png
Goodman-Jones-gold-white-v2.png
Birketts_Logo_Strapline_WHITE_on_purple.jpg
Rickard-Luckin.png
Turcan-Connell.png
Gorvins.png
Foot-Anstey_Logo_RGB.png
James-Cowper-Kreston-small.png
Wrigleys.png
MA_logo_Accelerators_black.png
axiom-logo.png
BM_LOGO_PRIMARY_BLACK_RGB (1).png
western-pension-solution-logo.png
TYWD Logo_Gold & Blue Centered.png
Forsters-new.png
Goodman-Jones-gold-white-v2.png
Birketts_Logo_Strapline_WHITE_on_purple.jpg
Rickard-Luckin.png
Turcan-Connell.png
Gorvins.png
Foot-Anstey_Logo_RGB.png
James-Cowper-Kreston-small.png
Wrigleys.png
MA_logo_Accelerators_black.png
axiom-logo.png
BM_LOGO_PRIMARY_BLACK_RGB (1).png
western-pension-solution-logo.png
TYWD Logo_Gold & Blue Centered.png
Forsters-new.png
Goodman-Jones-gold-white-v2.png
Birketts_Logo_Strapline_WHITE_on_purple.jpg
Rickard-Luckin.png
Turcan-Connell.png
Gorvins.png
Foot-Anstey_Logo_RGB.png
James-Cowper-Kreston-small.png
Wrigleys.png
Cleenol.png
John-Good.png
6 - Sound Leisure.png
mcalpine-logo.jpg
Potter-Space.png
9 - Bagnalls P&D Passion Logo_Colour.png
ridgeview.png
Malcolm Group Logo Black.png
Walkers-v2.png
JW-Lees-v2.png
Exclusive-Collection-logo-Matte-Black.png
Gap-Group-v2.png
9 - Caribbean Blinds - Logo - Black Background.png
1 - Furniture Village to use.png
Cleenol.png
John-Good.png
6 - Sound Leisure.png
mcalpine-logo.jpg
Potter-Space.png
9 - Bagnalls P&D Passion Logo_Colour.png
ridgeview.png
Malcolm Group Logo Black.png
Walkers-v2.png
JW-Lees-v2.png
Exclusive-Collection-logo-Matte-Black.png
Gap-Group-v2.png
9 - Caribbean Blinds - Logo - Black Background.png
1 - Furniture Village to use.png
Cleenol.png
John-Good.png
6 - Sound Leisure.png
mcalpine-logo.jpg
Potter-Space.png
9 - Bagnalls P&D Passion Logo_Colour.png
ridgeview.png
Malcolm Group Logo Black.png
Walkers-v2.png
JW-Lees-v2.png
Exclusive-Collection-logo-Matte-Black.png
Gap-Group-v2.png
9 - Caribbean Blinds - Logo - Black Background.png
1 - Furniture Village to use.png

Family Business United (‘FBU’) is an unparalleled rallying point and voice for the global family business community and an invaluable source of insight into the sector.  FBU is a resource for all, family businesses of all sizes and sectors, and their advisers, helping to raise the profile of the family business sector and to encourage greater awareness of the contribution that family firms make to the global economy through employment, income generation, wealth creation and charitable endeavours.

At FBU, everything we do is about the family business, creating the best resource available to help families in business get access to the resources and support they need to continue their family business journey, wherever it will take them.

bottom of page