Energy costs to be cut for industry as Starmer seeks economic ‘turning point'
The plan, which could cut bills by up to 25%, forms a key part of Sir Keir Starmer's 10-year industrial strategy which he hopes will address stuttering economic growth and transform the business landscape.
The Prime Minister said the plan marks a 'turning point for Britain's economy' by supporting key industries where there is potential for growth.
Manufacturers have warned 'crippling' power costs are far higher for UK businesses than competitors overseas.
From 2027, a new British Industrial Competitiveness Scheme will cut costs by up to £40 per megawatt hour for over 7,000 manufacturing firms by exempting them from levies on bills including the renewables obligation, feed-in tariffs and the capacity market.
Around 500 of the most energy-intensive firms, including the steel industry, chemicals and glassmaking, will also see their network charges cut – they currently get a 60% discount through the British Industry Supercharger scheme, which will increase to 90% from 2026.
The plan also promises measures to speed up the time it can take to connect new factories and projects to the energy grid.
Sir Keir said: 'This industrial strategy marks a turning point for Britain's economy and a clear break from the short-termism and sticking plasters of the past.'
He said the decade-long plan would deliver 'the long-term certainty and direction British businesses need to invest' during an 'era of global uncertainty'.
Energy Secretary Ed Miliband blamed 'our reliance on gas sold on volatile international markets' for the high electricity costs for businesses.
He said 'doubling down' on wind and nuclear power would 'bring down bills for households and businesses for good'.
The industrial strategy focuses on eight areas where the UK is already strong and there is potential for further growth: advanced manufacturing, clean energy, creative industries, defence, digital, financial services, life sciences and professional and business services.
Plans for five of the sectors will be published on Monday, but the defence, financial services and life sciences strategies will come later.
Other measures include:
– Increasing the British Business Bank's financial capacity to £25.6 billion, including £4 billion for sectors in the industrial strategy.
– Raising research and development spending to £22.6 billion a year by 2029/30.
– An extra £1.2 billion a year for skills by 2028-29 to train Britons to do jobs in growth industries and reduce reliance on foreign workers.
– Attracting 'elite' overseas talent through visa and migration reforms.
– Cutting the administrative cost of red tape by 25% and reducing the number of regulators.
– Reducing the time it takes to get planning permission by hiring more planners, streamlining pre-application requirements and combining environmental obligations.
– Increasing the supply of locations for investment around the country with a £600 million strategic sites accelerator.
The strategy comes after the latest figures indicated the economy shrank by 0.3% in April, the biggest monthly contraction in gross domestic product for a year-and-a-half, as businesses felt the impact of Donald Trump's tariffs and domestic pressure as a result of hikes to firms' national insurance contributions.
There are also concerns in industry about the impact of the Government's Employment Rights Bill, which could add to business costs.
Confederation of British Industry chief executive Rain Newton-Smith said: 'More competitive energy prices, fast-tracked planning decisions and backing innovation will provide a bedrock for growth.
'But the global race to attract investment will require a laser-like and unwavering focus on the UK's overall competitiveness.'
Manufacturers' organisation Make UK's chief Stephen Phipson said the three major challenges facing industry were 'a skills crisis, crippling energy costs and an inability to access capital for new British innovators', and the strategy 'sets out plans to address all three'.
TUC general secretary Paul Nowak said: 'We welcome ministers taking action to reduce sky-high energy costs for manufacturers – something unions have been calling for as a matter of urgency.
'For too long, UK industry has been hamstrung by energy prices far above those in France and Germany. It's made it harder to compete, invest, and grow.'
Acting shadow energy secretary Andrew Bowie said: 'It is astonishing that Labour are finally admitting that the costs of net zero are so high that they're having to spend billions of pounds of taxpayers' money subsidising businesses' energy bills to stop them going bust.'
Shadow business secretary Andrew Griffith has written an open letter to firms warning they are being 'sleepwalked into disaster' by the Employment Rights Bill.
He said: 'When it comes to business, it's actions, not words, which count, but this Government is stepping on the accelerator and the brake at the same time.'
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South Wales Guardian
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Sir Mark Rowley ‘shocked' at planned protest in support of Palestine Action
The Metropolitan Police Commissioner said a protest supporting the 'organised extremist criminal group' was due to take place in Westminster on Monday. He said until the group is proscribed the force has 'no power in law' to prevent the protest taking place, adding that breaches of the law would be 'dealt with robustly'. The act of vandalism committed at RAF Brize Norton is disgraceful. Our Armed Forces represent the very best of Britain and put their lives on the line for us every day. It is our responsibility to support those who defend us. — Keir Starmer (@Keir_Starmer) June 20, 2025 The Home Secretary will update Parliament on Monday on the Government's plan to ban Palestine Action following the group's vandalism of two planes at an RAF base. Yvette Cooper will provide MPs with more details on the move to proscribe the group, making it a criminal offence to belong to or support it, in a written ministerial statement. The decision comes after the group posted footage online showing two people inside the base at RAF Brize Norton in Oxfordshire. The clip shows one person riding an electric scooter up to an Airbus Voyager air-to-air refuelling tanker and appearing to spray paint into its jet engine. The incident is being investigated by counter-terror police. In a statement on Sunday, Sir Mark said: 'I'm sure many people will be as shocked and frustrated as I am to see a protest taking place tomorrow in support of Palestine Action. 'This is an organised extremist criminal group, whose proscription as terrorists is being actively considered. 'Members are alleged to have caused millions of pounds of criminal damage, assaulted a police officer with a sledgehammer and last week claimed responsibility for breaking into an airbase and damaging aircraft. Multiple members of the group are awaiting trial accused of serious offences. 'The right to protest is essential and we will always defend it, but actions in support of such a group go beyond what most would see as legitimate protest. 'Thousands of people attend protests of a different character every week without clashing with the law or with the police. The criminal charges faced by Palestine Action members, in contrast, represent a form of extremism that I believe the overwhelming majority of the public rejects. 'We have laid out to Government the operational basis on which to consider proscribing this group. If that happens we will be determined to target those who continue to act in its name and those who show support for it. 'Until then we have no power in law to prevent tomorrow's protest taking place. We do, however, have the power to impose conditions on it to prevent disorder, damage, and serious disruption to the community, including to Parliament, to elected representatives moving around Westminster and to ordinary Londoners. 'Breaches of the law will be dealt with robustly.' A spokesperson for Palestine Action previously accused the UK of failing to meet its obligation to prevent or punish genocide. The spokesperson said: 'When our Government fails to uphold their moral and legal obligations, it is the responsibility of ordinary citizens to take direct action. The terrorists are the ones committing a genocide, not those who break the tools used to commit it.' Cabinet minister Jonathan Reynolds said he could not rule out the possibility of a foreign power being behind Palestine Action. The Business and Trade Secretary told the BBC's Sunday with Laura Kuenssberg: 'It is extremely concerning they gained access to that base and the Defence Secretary is doing an immediate review of how that happened. 'The actions that they undertook at Brize Norton were also completely unacceptable and it's not the first. It's the fourth attack by that group on a key piece of UK defence infrastructure.' The Home Secretary has the power to proscribe an organisation under the Terrorism Act of 2000 if she believes it is 'concerned in terrorism'. Don't forget about Gaza. While the world is distracted, almost 400 people – queueing for food – have been gunned down by Israeli forces. You don't accidentally kill 400 people waiting for aid, they have been deliberately massacred. The UK must end all arms sales to Israel now. — Humza Yousaf (@HumzaYousaf) June 19, 2025 Proscription will require Ms Cooper to lay an order in Parliament, which must then be debated and approved by both MPs and peers. Some 81 organisations have been proscribed under the 2000 Act, including Islamist terrorist groups such as Hamas and al Qaida, far-right groups such as National Action, and Russian private military company the Wagner Group. Former justice secretary Lord Charlie Falconer said vandalising aircraft at RAF Brize Norton would not solely provide legal justification for proscribing the group. Asked whether the group's actions were commensurate with proscription, Lord Falconer told Sky News's Sunday Morning With Trevor Phillips: 'I am not aware of what Palestine Action has done beyond the painting of things on the planes in Brize Norton, they may have done other things I didn't know. 'But generally, that sort of demonstration wouldn't justify proscription so there must be something else that I don't know about.' Former Scottish first minister Humza Yousaf said the Government was 'abusing' anti-terror laws against pro-Palestine activists, as tens of thousands of protesters marched in London on Saturday. Belonging to or expressing support for a proscribed organisation, along with a number of other actions, are criminal offences carrying a maximum sentence of 14 years in prison. Home Secretary @YvetteCooperMP is banning Palestine Action. We are pleased that the Home Secretary has listened to our representations over the last week. Nobody should be surprised that those who vandalised Jewish premises with impunity have now been emboldened to sabotage RAF… — Campaign Against Antisemitism (@antisemitism) June 20, 2025 The Campaign Against Antisemitism (CAA) welcomed the news that Ms Cooper intended to proscribe Palestine Action, saying: 'Nobody should be surprised that those who vandalised Jewish premises with impunity have now been emboldened to sabotage RAF jets.' Former home secretary Suella Braverman also said it was 'absolutely the correct decision'. A pro-Palestine protester at Saturday's march in central London said it was 'absolutely horrendous' that the Government was preparing to ban Palestine Action. Artist Hannah Woodhouse, 61, told the PA news agency: 'Counter-terrorism measures, it seems, are being used against non-violent peace protesters. 'The peace activists are trying to do the Government's job, which is to disarm Israel.' Palestine Action has staged a series of demonstrations in recent months, including spraying the London offices of Allianz Insurance with red paint over its alleged links to Israeli defence company Elbit, and vandalising Donald Trump's Turnberry golf course in South Ayrshire.
