The UK government has unveiled a comprehensive industrial strategy aimed at addressing high energy costs that have hindered the competitiveness of domestic firms compared to their foreign counterparts.

This initiative comes in light of a recent economic contraction of 0.3% in April, underscoring the urgency to enhance the UK’s global market position amidst rising energy costs and skills shortages.

Developed in collaboration with businesses, the strategy specifically targets high electricity prices and delays in grid connections that have stifled industrial growth.

As part of this plan, the government intends to eliminate green levies on electricity bills, potentially reducing costs for businesses by up to 25%.

Energy-intensive sectors, including steel and glassmaking, will benefit from increased discounts on network charges, which will rise from 60% to 90% by 2026 under the British Industry Supercharger scheme.

Additionally, a separate initiative called the Connections Accelerator is set to launch in 2025, aimed at improving grid access for new investment projects.

Chancellor Rachel Reeves emphasized that the strategy not only seeks to alleviate energy costs but also focuses on workforce development and increasing disposable income for households.

Key components of the strategy include a significant increase in the British Business Bank's investment capacity and a commitment to boost research and development spending to £22.6 billion annually by 2029.

Business leaders have welcomed the announcement, urging the government to act swiftly to maintain the UK's competitive edge in the global market.

While industry leaders express cautious optimism about the strategy's potential, some critics have raised concerns regarding the Employment Rights Bill and its potential impact on business costs.

Energy Secretary Ed Miliband has attributed high electricity costs to reliance on volatile international gas markets, advocating for increased investment in renewable energy sources as a long-term solution.

Overall, the strategy aims to expedite the connection of new factories and projects to the energy grid, thereby facilitating faster industrial development and growth.