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High energy costs threaten UK manufacturing's future, industry warns
Published by Global Banking & Finance Review®
Posted on June 1, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 1, 2025
2 min readLast updated: January 23, 2026
High energy costs threaten UK's manufacturing future, warns Make UK. Urgent reforms are needed to attract investment and avoid de-industrialisation.
By Andy Bruce
MANCHESTER, England (Reuters) -Britain needs to cut industrial energy bills that are the highest among major advanced economies if its aspirations for a healthy manufacturing sector are to succeed, industry body Make UK said on Monday.
Prime Minister Keir Starmer's government is working on an industrial strategy to put British manufacturing - hit hard by Brexit, soaring energy costs and global trade wars - on a solid footing for the years ahead.
Manufacturing association Make UK said it should cancel climate levies imposed on industrial energy costs and adopt a fixed industrial energy price.
Britain had the highest industrial energy prices out of any International Energy Agency member country in 2023, reflecting its dependence on gas and its role in setting electricity prices.
"If we do not address the issue of high industrial energy costs in the UK as a priority, we risk the security of our country," Make UK chief executive officer Stephen Phipson said.
"We will fail to attract investment in the manufacturing sector and will rapidly enter a phase of renewed de-industrialisation."
Britain has de-industrialised - defined as the share of manufacturing in overall economic output - faster than in any other major European country over the last 30 years, according to a Reuters analysis of national accounts data.
Manufacturing hit a record low 9% of economic output last year, crowded out by the dominant services sector which now drives the majority of the country's exports - a first among Group of Seven advanced economies.
Alan Johnson, a senior executive for manufacturing, supply chain and purchasing at Nissan Motor, said its Sunderland plant in the north east of England had the highest energy costs out of any of its facilities in the world.
"The proposals being put forward by Make UK ... would send a strong message to investors that the UK remains committed to creating a more competitive environment for electric vehicle manufacturing," Johnson said.
(Reporting by Andy Bruce; Editing by Toby Chopra)
Britain had the highest industrial energy prices among International Energy Agency member countries in 2023, largely due to its dependence on gas.
High industrial energy costs could deter investment in the manufacturing sector and lead to a phase of renewed de-industrialisation in the UK.
Make UK has suggested canceling climate levies on industrial energy costs and adopting a fixed industrial energy price to help the manufacturing sector.
Manufacturing's share of overall economic output in the UK hit a record low of 9% last year, overshadowed by the services sector.
Alan Johnson from Nissan noted that their Sunderland plant has the highest energy costs of any of its facilities, highlighting the challenges faced by manufacturers.
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