UK Reveals Bold Industrial Strategy to Cut Energy Costs

The UK government has taken a dramatic step in attempts to reinforce its economy by introducing a radical new industrial strategy that will shore up energy-intensive industries such as advanced manufacturing, chemicals and life sciences. The plan is expected to have a reduction in energy costs and also provide the British companies with a competitive edge that it desperately needs and also have better growth in the long haul in a major industrially-focused manner.

On 23 June 2025, still under Chancellor Rachel Reeves and Prime Minister Keir Starmer, the strategy was announced to create a more stable environment in which British business operates amid an uncertain world economy. The new rules will save over 7,000 companies participating more than £40 per every megawatts hour that they use, the company said, beginning in 2027, or a reduction of around 25 per cent.

This is likely to place the UK businesses at par with competitors across the globe, the government reckons. A 90 per cent discount on network charges, which currently stands at 60 per cent, is also to be implemented by 2026 on firms in the electricity intensive sectors steel, chemicals and fertilisers.

Focusing on eight priority sectors

The eight identified high potential sectors of the industrial strategy that will be given targeted support by the industrial strategy under the what-the-government terms as the IS-8 are advanced manufacturing, life sciences, clean energy, digital and tech, defence, financial services, creative industries and business services. The aim of this focus will propel the UK to become a global leader in innovation come 2035.

For life sciences, the plan is especially ambitious. The officials hope to decrease trial acceptance times to below 150 days as well as to transform the Medicines and Healthcare Products Regulatory Agency (MHRA) into the most maneuverable regulatory agency in Europe. The government expects to turn the UK into the leading life sciences economy in Europe by 2030, and among the best three economies across the globe by 2035.

Britain is also looking to at least quadruple its spending by 2035 in major technologies such as wind, nuclear, hydrogen, and carbon capture in clean energy. To attract international investors, the government is also proposing to provide so-called catalytic funding that will spur private sector involvement.

Challenges and industry reactions

Though the plan is largely hailed as a visionary change, few have also cast doubt at the detail of the plan. Kieron Flanagan, a science policy professor at the University of Manchester observed that the strategy almost acts as a kind of roadmap rather than the complete 10-year blueprint. Others such as Tanya Sheridan of the Royal Society of Chemistry complimented the emphasis on basic research but cautioned that there is still more that is required to take action in aid of critical materials and feed stocks in various sectors.

Industry organizations too like the Chemical Industries Association reacted well to the proposed energy savings. The Association commented that the strategy recognizes the importance of chemicals in ensuring all domestic manufacturing takes place and said it was felt that more cooperation would assist in increasing competitiveness in the international market.

A long-term commitment to innovation

Keir Starmer explained the strategy as a break with short term solutions. The Prime Minister said, We are talking here of long-term certainty and the elimination of those barriers that have inhibited innovation and growth. Reeves concurred and said that the UK must not afford to stand still because other countries in the rest of the world are vying to get green investment and superior technologies.

The new Supply Chain Centre, which is expected to go online at the end of the year, is set to track the trends of demands within the sectors and manage the critical minerals better, which are expected to reduce the bottlenecks and strengthen resilience, according to the government.