A new comprehensive 10-year industrial strategy, spearheaded by Sir Keir Starmer, aims to significantly cut electricity costs for thousands of UK businesses, thereby boosting economic growth and transforming the business landscape. This ambitious plan, which could reduce bills by up to 25 percent for some firms, addresses concerns from manufacturers who have long warned that "crippling" power costs in the UK are far higher than for their international competitors.

A central pillar of the strategy is the introduction of a new British Industrial Competitiveness Scheme, set to come into force from 2027. This scheme will exempt over 7,000 manufacturing firms from various green levies, including the renewables obligation, feed-in tariffs, and the capacity market, potentially cutting costs by up to £40 per megawatt hour. Furthermore, approximately 500 of the most energy-intensive firms, such as those in the steel, chemicals, ceramics, and glassmaking industries, will see their network charges cut. Their existing 60 percent discount through the British Industry Supercharger scheme will increase to a more generous 90 percent from 2026, aiming to narrow the cost gap with European rivals like Germany and France.

The strategy also includes measures to accelerate the connection of new factories and projects to the national energy grid, utilizing new powers within the Planning and Infrastructure Bill to reserve grid capacity for strategically important ventures. Energy secretary Ed Miliband attributed high electricity costs to the UK's "reliance on gas sold on volatile international markets," advocating for a "doubling down" on wind and nuclear power to permanently lower bills for both households and businesses.

Beyond energy reforms, the industrial strategy focuses on supporting eight key sectors where the UK possesses existing strengths and significant growth potential: advanced manufacturing, clean energy, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. Initial detailed plans for five of these sectors are expected on Monday, with defence, financial services, and life sciences strategies to follow. Other crucial elements of the strategy include an annual investment of an extra £1.2 billion for skills by 2028-29 to upskill Britons and reduce reliance on foreign workers, reforms to visa and migration policies to attract "elite global talent," streamlined planning processes to cut costs for developers, and a boost to research and development spending to £22.6 billion per year by 2029-30, including a dedicated £2 billion for Artificial Intelligence.

Funding for the new energy schemes is anticipated through reforms to existing environmental and green levies, such as the Emissions Trading Scheme and contracts for difference. To enhance regional attractiveness for investors, the government plans to simplify local tax breaks by consolidating freeports, investment zones, and enterprise zones into unified "Industrial Strategy Zones." This shake-up is designed to eliminate confusion among these nearly identical special economic zones and is expected to devolve further power, particularly regarding planning, to regional mayors. Moreover, the strategy allocates £275 million by 2029 for new education programmes and apprenticeships to train thousands more skilled UK workers, especially in defence and engineering, alongside a £380 million boost for the creative industries, with £150 million specifically designated for mayors in key regional hubs like Liverpool, Manchester, the West Midlands, and West Yorkshire.

This comprehensive strategy is unveiled against a backdrop of economic challenges, including a 0.3 percent contraction in the UK economy in April, marking its worst performance in eighteen months, and ongoing concerns from business groups regarding potential impacts of the government's Employment Rights Bill. While industry leaders like Rain Newton-Smith of the CBI and Stephen Phipson of Make UK have largely welcomed the focus on competitive energy prices, planning, and innovation, some criticisms have emerged. Shadow energy secretary Andrew Bowie questioned the sustainability of subsidizing businesses' energy bills given the costs of net zero, and Adam Bell of Stonehaven consultancy highlighted a "bunch of missing money" regarding the funding mechanisms. Despite these points, the strategy aims to provide the "long-term certainty and direction" British businesses require to invest, innovate, and create jobs in an era of global uncertainty, marking what Sir Keir Starmer describes as a "turning point for Britain's economy."