The government’s industrial strategy aims to harness the best of British business, from automotive to video gaming via the City and life sciences, in order to deliver the economic growth on which all else depends.
A year in the planning with a 10-year horizon for delivery, in its final months it was hijacked by a very short-term issue; how to give industries battered by the highest electricity prices in the world a chance of competing now, never mind the 2030s.
The answer, as reported by Sky News last week, is a significant cut to bills not just for “energy intensive users” such as concrete and chemicals that already enjoy support, but to 7,000 manufacturers for whom energy is a high proportion of costs.
Money latest: Why Amazon is ‘disappointed’
They will receive around 15% off their bills from 2027, at an estimated cost of £500m a year.
Exactly who benefits will be decided after consultation but the mechanism for delivering discounts, and how they will be paid for, is already decided, and the answer tells us an awkward truth about the UK’s energy market.
To make industrial energy prices more competitive, qualifying businesses will be exempt from paying some of the taxes and levies added to bills to incentivise the building of renewable energy sources.
These so-called “policy-costs”, which make up around 15% of energy bills, have been fundamental to the massive expansion of wind and latterly solar power, supported by successive governments over the last two decades.
This race for renewables is intended not just to lower emissions but to deliver more stable and, say Labour, cheaper bills by reducing our exposure to volatile gas prices.
The UK has been hugely successful in the first part, and green technologies are one of the eight high-growth sectors favoured in this industrial strategy.
Israel-Iran latest: Israeli strikes target…
