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.
Prime Minister Sir Keir Starmer said the plan would offer long-term certainty for key industries (Andy Buchanan/PA)
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.
Energy Security and Net Zero Secretary Ed Miliband said relying on gas from volatile markets had driven costs sky-high for businesses (Kin Cheung/PA)
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.'

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Daily Mirror

20 minutes ago

• Daily Mirror

UK military bases on 'highest level' red alert after US bombing of Iran

The British armed forces are on the highest level of alert for drone strikes after the US bombing of Iran, the Defence Secretary has confirmed British forces stationed throughout the Middle East have been placed on heightened alert for potential drone strikes after the US airstrikes on Iran, as per Defence Secretary John Healey. Healey has affirmed that protection of UK Armed Forces is now at "highest level" amid escalating concerns that the US action might ignite a broader conflict, as published in The Telegraph. ‌ Since the strikes took place early Sunday morning, security measures at British bases in the Middle East have been significantly intensified, with staff preparing for the possibility of not only drone attacks but conventional rocket and missile assaults too. ‌ The increased state of alert also comes at a time of growing worry over threats to UK bases both domestically and abroad. On Saturday, a British national was apprehended in Cyprus under suspicion of conducting espionage on an RAF base for Iran, closely following an incident where two pro-Palestinian activists infiltrated RAF Brize Norton and caused damage to two planes, reports the Express. In his column for the newspaper on Sunday, Mr Healey penned: "The safety of UK personnel and bases is my top priority. Force protection is at its highest level, and we deployed additional jets this week." Senior defence officials are particularly cautious of the use of drones following an event where Ukrainian drones wreaked havoc on 40 Russian aircrafts –including those capable of carrying nuclear warheads– across Russia. With the ongoing conflict in Ukraine, Russia's employment of Iranian-made Shahed drones has led to widespread power outages and significant destruction of infrastructure. ‌ The Shahed-136's explosive payload, originally designed to demolish buildings, can now also deliver lethal fragmentation or thermobaric blasts. Iran has recently deployed these drones against targets in Israel. Earlier this month, Sir Keir Starmer confirmed that additional RAF jets would be dispatched to the region to enhance security. British bases in the Middle East include RAF Akrotiri in Cyprus, where 14 RAF jets are currently stationed, as well as naval hubs in Bahrain and Oman and shared airbases in Qatar and the UAE. Potential extra security measures could involve increasing armed guards, issuing live ammunition and deploying more radar systems. The US acted independently in its strikes on Iran, and so far Iran's threats of retaliation have been solely directed at America. It is understood that British bases are not yet preparing for any immediate, targeted attack, but the heightened alert reflects the broad range of threats - from rockets to improvised explosive devices - that UK forces could potentially face.

Leader Live

an hour ago

• Leader Live

Lord Sugar: Amstrad-inspired firm led by grandson ‘not relying on past glory'

The business mogul announced last year that he had bought back the rights to the household brand name and was launching Amstrad Digital. The firm is headed by his grandson Joe Baron, and Tom D'Arcy, who both worked at a rival agency, Climb Online, which was set up by The Apprentice winner Mark Wright. A year since launching, Essex-based Amstrad Digital has generated a turnover of around £600,000. This has partly been possible through projects with a raft of businesses under Lord Sugar's own portfolio – many of which stem from the BBC One boardroom-based reality series. They include the latest winner of the programme, Dean Franklin, who secured £250,000 of investment from Lord Sugar into the air conditioning business that he set up during the pandemic. Lord Sugar said Amstrad Digital was 'not just treading water' but was making money and 'laying down a foundation for serious long-term growth'. 'The brand still carries weight, and they're using that smartly – not just relying on past glory but backing it up with a solid service offering,' he told the PA news agency. 'From day one, Amstrad's always been about giving people value for money. 'No fluff, no overpriced nonsense – just a solid, affordable product that actually does what it says on the tin. 'That was the principle back in the 1980s, and I made sure we kept that at the heart of Amstrad Digital.' The businessman founded electronics company Amstrad in 1968, at the age of 21, selling audio and computer equipment before making the first range of Sky receivers and dishes. It was eventually sold for £125 million to the broadcasting giant, which still uses the software but not the brand name. After handing over the reins to his grandson, Lord Sugar said Mr Baron has a 'strong appetite for success', adding: 'I expect nothing less.' 'Joe being my grandson has not meant that he gets any handouts and exceptions when things get difficult,' he told PA. Mr Baron acknowledged uncertainty in the wider industry amid businesses making cutbacks on marketing spending, and concerns over the rapid growth of artificial intelligence (AI). He said the uncertainty was 'difficult' but an 'opportunity for us to set ourselves apart, which has been the aim since day one'. Earlier this month, digital marketing firm S4 Capital, which was founded by the former boss of WPP, said clients were remaining cautious about spending due to tougher economic conditions and uncertainty about global trade.

South Wales Guardian

an hour ago

• South Wales Guardian

Starmer and Trump call for Iran to return to negotiating table after US strikes

The Prime Minister spoke to the US President on Sunday night after an air raid by B-2 stealth bombers and a salvo of submarine-launched missiles hit Iran's nuclear facilities. Downing Street said the leaders agreed Tehran must not be allowed to develop a nuclear weapon and called for Iran to return to negotiations. 'The leaders discussed the situation in the Middle East and reiterated the grave risk posed by Iran's nuclear programme to international security,' Downing Street said. 'They discussed the actions taken by the United States last night to reduce the threat and agreed that Iran must never be allowed to develop a nuclear weapon. 'They discussed the need for Iran to return to the negotiating table as soon as possible and to make progress on a lasting settlement. 'They agreed to stay in close contact in the coming days.' Earlier, Sir Keir – whose previous calls for restraint appear to have been ignored by the American leader – said there was a 'risk of escalation', adding: 'That's a risk to the region. It's a risk beyond the region, and that's why all our focus has been on de-escalating, getting people back around to negotiate what is a very real threat in relation to the nuclear programme.' The UK was not involved in the US operation but there is the prospect of British forces being dragged into the conflict if Ayatollah Ali Khamenei orders a retaliation. Speaking to reporters at his Chequers country retreat he would not be drawn on whether Nato's mutual defence pact would apply if US forces were targeted. Sir Keir said 'we have taken all necessary measures to protect UK interests, UK personnel and to work with our allies to protect their interests as well'. Extra RAF Typhoon jets have already been moved to the region and Defence Secretary John Healey said 'force protection is at its highest level' following the US strikes. On a day of intense diplomatic activity, Sir Keir also held calls with the Sultan of Oman, the King of Jordan, Canada's Mark Carney and European counterparts Emmanuel Macron and Friedrich Merz. Ministers from the E3 – the UK, France and Germany – had been involved in talks with Iran as recently as Friday as European allies sought to avoid further escalation in the Middle East. In a joint statement with the French president and German chancellor, Sir Keir said: 'We urge Iran not to take any further action that could destabilise the region.' Foreign Secretary David Lammy spoke to his Iranian and Israeli counterparts 'to stress the need for de-escalation'. 'I urged a diplomatic, negotiated solution to end this crisis,' he said. The Foreign Office dismissed as 'inaccurate' a report by Iran's IRNA news agency that Mr Lammy 'expressed regret' over the US strikes. Mr Lammy also spoke to US secretary of state Marco Rubio and the foreign ministers of Egypt and Cyprus. The US attacked Fordo, Isfahan and Natanz which are linked to Iran's nuclear programme. The Tehran regime has insisted its nuclear programme is peaceful but its uranium enrichment process has gone far beyond what is required for power stations. According to details released by the Pentagon: Operation MIDNIGHT HAMMER was a success. — DOD Rapid Response (@DODResponse) June 22, 2025 – The strikes, which had the codename Operation Midnight Hammer, involved more than 125 aircraft. – A complicated decoy operation was used, with one group of bombers flying west over the Pacific in a move widely documented on social media by aviation enthusiasts, while the 'strike package' of seven B-2s secretly flew east across the Atlantic. – During the 18-hour flight to Iran, the stealth bombers were refuelled several times then linked up with escort aircraft once over land. – At around 2.10am in Iran the first bunker-busting massive ordnance penetrator (Mop) bombs were dropped on Fordo. – A total of 14 Mops were dropped across two of the nuclear sites. – No Iranian shots were fired at the bombers during the mission. – A US submarine launched more than two dozen Tomahawk missiles at Isfahan, which struck the target after the B-2 raids to maintain the element of surprise. – The initial assessment is that 'all three sites sustained extremely severe damage and destruction', chairman of the joint chiefs of staff General Dan Caine said. Iran must never have a nuclear weapon. The US has now taken action to alleviate that threat. I've spoken today with my counterparts in Iran and Israel to stress the need for de-escalation. I urged a diplomatic, negotiated solution to end this crisis. — David Lammy (@DavidLammy) June 22, 2025 Conservative leader Kemi Badenoch said: 'By targeting Iran's nuclear sites, the US has taken decisive action against a regime that fuels global terror and directly threatens the UK. 'Iranian operatives have plotted murders and attacks on British soil. We should stand firmly with the US and Israel.' Reform UK leader Nigel Farage also backed Mr Trump's decision to strike Iran. He said: 'Iran must not be allowed to have nuclear weapons, the future of Israel depends on it.' Liberal Democrats leader Sir Ed Davey said 'robust diplomacy' was now needed to eliminate Iran's nuclear threat, adding: 'Following the US strikes, it is essential that we work to de-escalate the conflict and achieve that diplomatic solution.' Scotland's First Minister John Swinney called for diplomacy, saying the Middle East conflict has reached 'an alarmingly greater level of danger after the US attacks on Iran'. Iran launched a ballistic missile barrage against Israel in retaliation to the US action. The foreign ministry in Tehran issued a statement condemning 'the United States' brutal military aggression against Iran's peaceful nuclear facilities'. It added: 'The Islamic Republic of Iran is resolved to defend Iran's territory, sovereignty, security and people by all force and means against the United States' criminal aggression.' Mr Trump said any retaliation would be met with 'force far greater' than that used in the initial strikes. In a post on Truth Social on Sunday, Mr Trump said: 'It's not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!!' The social media post marked a reversal from previous statements on regime change, including an earlier press conference from defence secretary Pete Hegseth, about the bombing on Iran's three nuclear sites.