Industry warns that high energy costs are a threat to the future of UK manufacturing

Make UK, an industry group, said that Britain must reduce its industrial energy bills which are among the highest in advanced economies to achieve its goal of a healthy manufacturing sector.

The government of Keir starmer is developing an industrial strategy that will put British manufacturing, which has been hit by Brexit and soaring energy prices as well as global trade wars, on a firm footing in the coming years.

The manufacturing association Make UK has called for the cancellation of climate levies on industrial energy prices and the adoption of a fixed price.

In 2023, Britain's industrial energy prices were the highest of all member countries of the International Energy Agency. This reflects its dependence on natural gas and its role setting electricity prices.

Stephen Phipson, Make UK's chief executive officer, said: "We risk the safety of our country if we don't address the high cost of industrial energy in the UK on a priority basis."

"We will fail to attract investment in the manufacturing sector and will rapidly enter a phase of renewed de-industrialisation."

According to an analysis of data from national accounts, Britain de-industrialised faster than any other major European nation over the past 30 years.

The manufacturing sector has dropped to a record-low 9% of GDP last year. This is the lowest level among the Group of Seven advanced economies.

Alan Johnson, Nissan Motor's senior executive in charge of manufacturing, supply chain, and purchasing, stated that the Sunderland facility in the north-east of England has the highest energy costs of all its facilities around the world.

Johnson stated that "the proposals put forward by Make UK...would send a powerful message to investors about the UK's commitment to creating a competitive environment for electric car manufacturing." (Reporting and editing by Toby Chopra; Reporting by Andy Bruce)

(source: Reuters)