Industry reacts to modern Industrial Strategy publication

The strategy outlines a renewed partnership between government and business, designed to make Wales – and the wider UK – one of the most attractive locations to start and scale up a business. It targets regional strengths, with a focus on North Wales’ established aerospace industry and South Wales’ world-first compound semiconductor cluster.

More than 7,000 UK businesses are set to see their electricity bills fall by up to 25%, as the government tackles long-standing challenges that have hindered industrial growth. British manufacturers currently face some of the highest electricity costs in the developed world – in some instances, paying double the European average. Delays in grid connectivity have also obstructed expansion efforts.

From 2027, the new British Industrial Competitiveness Scheme will offer reductions of up to £40 per megawatt hour for electricity-intensive firms in sectors such as automotive, aerospace, and chemicals. These businesses, which support over 300,000 skilled jobs across the country, will also become exempt from environmental levies including the Renewables Obligation, Feed-in Tariffs, and the Capacity Market. Details of the scheme, including eligibility, are set to be confirmed following consultation.

In parallel, the British Industry Supercharger initiative increases support for the most energy-intensive sectors. From 2026, the discount on electricity network charges for industries such as steel, chemicals, and glass rises from 60% to 90%. This move is expected to reduce operating costs significantly, safeguarding jobs and encouraging investment.

The reforms are aligned with the government’s broader aim of achieving clean power independence, reducing reliance on volatile fossil fuel markets and delivering lower energy costs in the long term.

The Industrial Strategy presents a comprehensive plan to boost business investment and simplify the regulatory landscape, with a goal of generating 1.1 million well-paid jobs in future-facing industries. Wales, already outperforming its size in key sectors, stands in a strong position to capitalise on the opportunities it presents.

Prime Minister Keir Starmer 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.

“In an era of global economic instability, it delivers the long term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people’s pockets as part of the plan for change.

“This is how we power Britain’s future – by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear – Britain is back and open for business.”

The Strategy’s bold plan of action includes:

• Slashing electricity costs by 20-25% to level the playing field for energy-hungry industries like chemicals and key growth sectors like automotive
• Unlocking billions in finance for innovative business, especially for SMEs by increasing British Business Bank capacity to £25.6 billion, crowding in tens of billions of pounds more in private capital
• Reducing regulatory burdens by cutting the administrative costs of regulation for business by 25% and reduce the number of regulators
• Boosting R&D spending to £22.6 billion per year by 2029-30 to drive innovation across the IS-8, with more than £2 billion for AI over the Spending Review, and £2.8 billion for advanced manufacturing over the next ten years. This will leverage in billions more from private investors. Regulatory changes will further clear the path for fast-growing industries and innovative products such as biotechnology, AI, and autonomous vehicles
• Attracting elite global talent to key sectors, via visa and migrations reforms and a new the Global Talent Taskforce.
• Revolutionising public procurement and reducing barriers for new entrants and SMEs to bolster domestic competitiveness

Five sector plans have also been published:

1. Advanced Manufacturing – backing the Advanced Manufacturing sector with up to £4.3 billion in funding, including up to £2.8 billion in R&D over the next five years, with the aim of anchoring supply chains in the UK – from increasing vehicle production to 1.35 million, to leading the next generation of technologies for zero emission flight
2. Clean Energy Industries – doubling investment in Clean Energy Industries by 2035, with Great British Energy helping to build the clean power revolution in Britain with a further £700 million in clean energy supply chains, taking the total funding for the Great British Energy Supply Chain fund to £1 billion
3. Creative Industries – maximising the value of Creative Industries through a £380 million boost for film and TV, video games, advertising and marketing, music and visual and performing arts will improve access to finance for scaleups and increase R&D, skills and exports
4. Digital and Technologies – making the UK the European leader for creating and scaling Digital and Technology businesses, with more than £2 billion to drive the AI Action Plan, including a new Sovereign AI Programme and targeting R&D investment at frontier technologies such as cyber security in Northern Ireland, semiconductors in Wales and quantum technologies in Scotland
5. Professional and Business Services – ensuring Professional and Business Services becomes the world’s most trusted adviser to global industry, revolutionising the sector across the world through adoption of UK-grown AI and working to secure mutual recognition of professional qualifications agreements overseas

Thoughts from the industry

Cara Haffey, Manufacturing Leader at PwC, said: "Manufacturing in the UK has been hampered due to high energy costs for far too long, today's announcement is a game-changer for manufacturers across the country who ‘currently pay some of the highest electricity prices in the developed world’. Our Framework for Growth research also identified skills as a critical issue impacting competitiveness and growth. It cannot be overstated the impact this has had on the industry historically. The emphasis now is on strengthening collaboration and scaling up – this will be vital as we navigate the global competition as a relatively small nation. By implementing a regional, place-based excellence strategy, manufacturers can unite their efforts and enhance their competitive edge. 

“Integration of plans and policies will also be welcomed by Manufacturers, specifically in energy, innovation, skills, trade, and foreign direct investment – alignment will enhance long-term sustainability and resilience. 

“Our nation is home to exceptional technical engineering expertise, positioning us perfectly to lead in scaling and reshoring manufacturing efforts. Now we have the support in place, we must maximise the opportunity this presents, now is the time to rise and to perform for the UK economy.” 

Kelly Becker, President, UK & Ireland, Belgium & Netherlands at Schneider Electric said: “The forthcoming Industrial Strategy and the growth sector plans will help to provide long-term policy clarity and confidence in the UK market. The UK has some of the most innovative industries and best universities in the world, alongside clear plans for decarbonisation. In a competitive international environment, the Industrial Strategy must provide businesses in the UK with a clear roadmap for public-private cooperation, as well as much-needed incentives.    

“Yet, high energy prices are one of the biggest barriers to the UK’s industrial growth and decarbonisation. The Government must urgently introduce supportive measures for manufacturers and other industries such as data centres whilst reform of the electricity market is taking place.  

“Energy efficiency and digitalisation are key to decarbonisation and reduced energy costs – and the technology exists to make this a reality. What’s needed is policy that incentivises widespread adoption and can drive down industrial costs across the board – after all, the cheapest energy is the energy not used.  

“Ultimately, strengthening the UK’s industrial backbone demands urgent and decisive action to accelerate its decarbonisation and digitalisation agenda. This is critical to energy security, reducing industrial costs over the long term, and building economic resilience.” 

Beatrice Barleon, Head of Policy and Public Affairs at EngineeringUK comments: “The government’s ambitious plans for the economy should go some way to creating certainty for businesses across the UK. We hope that this certainty will in turn support employers’ confidence in investing in skills.  

“We welcome the acknowledgement that the success of the Industrial Strategy relies on the UK having a skilled workforce. We are particularly pleased with the recognition of the important role engineering and tech skills have in underpinning multiple sectors. It’s vital that government links sector plans into a wider engineering & technology workforce strategy and avoids silo thinking.

“We are also pleased to see recognition of the importance of gender equity and diversity in the workforce more generally throughout the strategy. Addressing this imbalance will be vital to achieving the ambitions set out.     

“We welcome the commitment for Government, and Skills England, to collaborate regionally and across devolved nations and will look to work with Government to support this effort.

“We look forward to working with Government on how to take the strategy forward, for example, how we create more opportunities for 16 to 19-year-olds, and how the Government can reach 1 million students across every secondary school in the UK and ensure they are offered the chance to learn about technology and gain access to new skills training and career opportunities by 2029.”