The UK government unveiled a sweeping 10-year Industrial Strategy on Monday, June 23, 2025, aiming to turbocharge economic growth, slash energy costs for manufacturers, and position Britain as a global leader in innovation and clean energy. This ambitious framework, the first of its kind in eight years, targets eight key sectors including advanced manufacturing, clean energy, digital technologies, and financial services, with the goal of fostering investment, job creation, and productivity across the nation.
At the heart of the strategy lies a bold plan to reduce electricity bills by up to 25% for more than 7,000 energy-intensive businesses starting in 2027. This will be achieved through the newly introduced British Industrial Competitiveness Scheme, which exempts qualifying firms from some green energy levies that have historically driven up costs. The government estimates that this could cut costs by up to £40 per megawatt-hour, providing a vital boost to industries such as automotive, aerospace, chemicals, steel, and glassmaking.
Prime Minister Sir Keir Starmer described the strategy as a "turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past." He emphasized the need to "stabilise" and "mitigate" challenges from abroad, particularly soaring energy prices, stating, "This strategy delivers cheaper electricity prices in this country in the long term." Starmer also highlighted the importance of backing sectors where the UK already excels, removing barriers to growth, and creating good jobs that put more money in people’s pockets.
Industry leaders broadly welcomed the strategy’s long-term vision. Martin Pibworth, Chief Executive designate at SSE plc, praised the government’s focus on homegrown energy, calling it "the right thing for security, resilience and affordability." SSE plans to invest £17.5 billion over five years to 2027 to build infrastructure, create high-quality jobs, and support the supply chain, underpinning the UK’s transition to a net zero economy.
Similarly, Stephen Phipson, chief executive of Make UK, applauded the government for addressing "a skills crisis, crippling energy costs and an inability to access capital for new British innovators." Trades Union Congress general secretary Paul Nowak added that reducing "sky-high energy costs for manufacturers" was essential to help UK industry compete internationally.
However, the strategy was not without its critics. Acting shadow energy secretary Andrew Bowie expressed skepticism about subsidizing businesses’ energy bills, calling it "astonishing" that Labour was "finally admitting that the costs of net zero are so high that they're having to spend billions of pounds of taxpayers' money subsidising businesses' energy bills to stop them going bust." Meanwhile, the hospitality and retail sectors, which collectively employ over 7 million people, voiced disappointment at being excluded from the plan. Kate Nicholls, chief executive of UKHospitality, lamented, "How can national renewal be properly delivered if 70% of the economy is excluded from the government's flagship plan for growth?"
The strategy also sets out a comprehensive package to boost skills and innovation. The government plans to increase annual spending on skills by £1.2 billion by 2028-29 to reduce reliance on foreign workers and enhance the UK workforce’s capabilities. Visa and migration reforms aim to attract "elite global talent," while hiring more planners and streamlining application processes should speed up development projects and reduce costs.
On the innovation front, research and development funding will rise sharply to £22.6 billion per year by 2029-30, with over £2 billion earmarked for artificial intelligence (AI) and £2.8 billion for advanced manufacturing. The Made Smarter programme will support over 5,500 small and medium-sized businesses in adopting new technologies, complemented by the Business Growth Service.
Technology companies welcomed the emphasis on AI and digital innovation but urged caution. Sarah Walker, CEO of Cisco UK&I, highlighted technology’s pivotal role and the urgent need to expedite deployment. She noted that only 10% of UK organisations are fully prepared to harness AI’s potential, with 86% fearing significant negative impacts if they fail to implement AI strategies within 18 months. Walker stressed that "AI adoption and implementation is primarily a people challenge," requiring upskilling across various job roles to avoid widening economic disparities.
Mark Boost, CEO of Civo, welcomed the strategy’s ambition but warned that true digital sovereignty requires control over not just AI software but also the underlying hardware. He urged investment in UK-owned infrastructure, cautioning against overreliance on foreign cloud giants governed by external laws such as the US CLOUD Act.
Phillip Kaye, co-founder of data centre specialist Vespertec, pointed to semiconductors as a potential linchpin for success, advocating increased research funding at UK universities, especially in Wales. He argued that advanced hardware is crucial for maintaining competitiveness alongside global tech giants.
Chris Knight, VP of automotive at NTT DATA UK&I, praised initiatives like AI Growth Zones and advanced manufacturing clusters for enabling next-generation, data-driven supply chains. He noted that UK firms often suffer from disconnected digital systems, leading to inefficiencies that these initiatives aim to resolve.
Yet concerns remain about the strategy’s implementation. Pulsant CEO Rob Coupland cautioned against rushed regulation that might hinder growth, warning of a "London-centric strategy" that could overlook the diversity of the UK’s AI ecosystem. He emphasized the need for integration between the AI Energy Council’s recommendations and AI growth zones to avoid fragmentation.
The government also plans to accelerate grid connections for new factories and projects through a Connections Accelerator Service, prioritising those with strong economic and employment impacts. This move responds to calls from business groups and campaigners for faster infrastructure development to support growth.
Financially, the strategy is designed to be self-funding without raising household bills or increasing borrowing. Funding will come from reforms to existing green energy subsidies, including stretching renewable energy producer subsidies over a longer timeframe and the UK’s proposed readmission to the EU carbon emissions trading system, which is expected to raise revenues and reduce costs.
Business groups have rallied behind the strategy. Shevaun Haviland, Director General of the British Chambers of Commerce, and Rain Newton-Smith, Director General of the Confederation of British Industry, issued a joint statement calling for businesses nationwide to support the plan and champion the UK as "the best place to live, work, invest, and do business." They highlighted the need for a stable, attractive environment enabling faster, more certain investment decisions.
Despite manufacturing accounting for less than 9% of the UK economy, the government’s focus on this sector reflects its strategic importance in driving innovation and exports. The strategy also covers creative industries, defence, life sciences, and professional services, though some sectors argue they have been left out.
Overall, the UK’s new Industrial Strategy represents a comprehensive attempt to tackle long-standing challenges around energy costs, skills shortages, and innovation capacity. It seeks to balance the urgency of economic recovery with the imperative of a sustainable, net zero future. As Sir Keir Starmer put it, "Our message is clear – Britain is back and open for business." Whether this decade-long plan can deliver on its promises remains to be seen, but the government and business community appear united in their determination to make it work.
