Pratley Warns Britain Faces Industrial Decline Over Energy Costs — British Manufacturing Deindustrialisation Crisis
Britain’s british manufacturing deindustrialisation crisis is sharpening because manufacturers pay the highest electricity prices in the G7, leaving firms under pressure to cut production, postpone investment and move work abroad. Nils Pratley said ministers need a proper strategy to cut energy costs before there are more closures.
G7 electricity costs bite
UK manufacturers are paying four times as much for electricity as US counterparts, and the gap is already changing corporate decisions. Almost one in 10 manufacturers surveyed by Make UK have moved some production overseas, while 16% are considering doing the same if bills do not fall.
Almost four in 10 companies in the survey have delayed investment, and more than a fifth have reduced headcount. Those numbers point to a sector that is not simply complaining about prices; it is changing where it invests, where it makes products and how many workers it keeps on payroll.
Reeves faces a narrow fix
25% is the planned cut in electricity bills for qualifying manufacturers under the British industrial competitiveness scheme from next April, with a back-payment covering this year. Only 10,000 companies qualify, though Make UK says all 130,000 manufacturers should be covered, and it has calculated that extending the scheme would cost £3bn.
£600m is the expected cost of the government’s separate plan to remove three levies from electricity bills. A deeper supercharger scheme already gives larger discounts to 500 heavy industrial users, but that leaves most manufacturers outside the most generous support.
130,000 manufacturers split
130,000 manufacturers would be covered if the scheme were widened as Make UK wants, a change it says would better match the scale of the problem. The current setup leaves support concentrated on 10,000 companies, even as the wider sector keeps warning that high power costs are pushing investment and jobs out of Britain.
2.5 million workers depend on manufacturing, so the risk is not confined to factory owners or energy-intensive plants. If ministers keep the relief narrow, the pressure moves from balance sheets to payrolls and eventually to output, with more companies likely to follow the firms already shifting production overseas.
