UK Manufacturing Sector Sounds Alarm Over Crippling Energy Bills
The UK's industrial base is facing an existential threat from some of the highest energy prices in the developed world, with industry leaders demanding immediate government action. The recent closure of major facilities like the Port Talbot steelworks and ExxonMobil's ethylene plant in Fife has highlighted the severe competitive disadvantage facing British manufacturers.
Manufacturers' organisation Make UK has issued an urgent call for the government to expand and accelerate its energy support package. Their proposal would extend the British Industrial Competitiveness Scheme (BICS) from covering 7,000 firms to 115,000 businesses and implement the changes by April 2025 rather than the planned April 2027 start date.
Government Support Falling Short
The current government strategy, announced in June, focuses support on just eight priority sectors while leaving many energy-intensive manufacturers exposed. Business Secretary Peter Kyle is only now launching a consultation on how BICS will be implemented, five months after the initial announcement.
Meanwhile, companies are bracing for significant bill increases next April when higher transmission charges begin funding the £80 billion electricity grid upgrade. Make UK estimates some heavy energy users could face additional costs of £500,000 annually.
While approximately 500 firms in the most energy-intensive industries will receive protection through the separate 'supercharger' scheme, many substantial energy users just below the threshold face being caught in what industry leaders describe as an eye of the storm.
The Human Cost of Deindustrialisation
Each factory closure tells a complex story, but the common thread remains unsustainable energy costs. The Port Talbot steelworks, Grangemouth oil refinery, and now ExxonMobil's 40-year-old Fife plant represent not just economic losses but communities facing uncertain futures.
Stephen Phipson, CEO of Make UK, states unequivocally: "The clock is ticking on tackling our eye-watering energy costs and it is now a case of political will rather than any technical constraints to addressing these."
The government's original ambition to cut electricity prices by up to £40 per megawatt hour and move the UK from being an energy cost outlier to competitive with international peers now appears stalled. With Peter Kyle scheduled to speak at the Confederation of British Industry, manufacturers await concrete plans and accelerated timelines.
As one industry representative noted, waiting until 2027 for relief is simply too late for businesses already making difficult decisions about their future operations in the UK.
