Energy costs to be cut for businesses in Wales in new industrial strategy
Energy costs to be cut for businesses in Wales in new industrial strategy
The electric arc steel furnace being built at Port Talbot steelworks is one of the businesses that will be benefit
The steelworks in Port Talbot, where a new electric arc furnace is to be installed
(Image: Getty Images )
The UK Government says that the planned electric arc furnace at Port Talbot steelworks will be boosted by plans to slash electricity costs for the industry by 25%.
A new industrial strategy published by the UK Government is promising to cut energy costs for some 7,000 businesses across the UK to help companies in the face of energy costs that are among the highest in Europe.
The new Tata furnace at Port Talbot, which comes into operation in three years time in 2028, will be among those to benefit according to business secretary Jonathan Reynolds.
The new 'British industrial competitiveness scheme' will reduce electricity costs by up to £40 per megawatt hour for over 7,000 electricity-intensive businesses in manufacturing sectors like automotive, aerospace and chemicals.
Firms which support over 300,000 skilled jobs across the UK will be exempt from paying levies such as the renewables obligation, feed-in tariffs and the capacity market in a move to help "level the playing field and make them more internationally competitive".
The strategy, published today, promises increased economic growth, billions in investment and tens of thousands of new jobs supported over the next decade for Wales.
Article continues below
It saysiits measures will "forge a new relationship between business and government, making Wales and the UK the best place to start and scale up a business".
It promises to "unlock growth across Wales", by utilising the country's strengths in aerospace in north Wales to the world's first compound semiconductor cluster in South Wales.
It says that more than 7,000 UK businesses are set to see their electricity bills slashed by up to 25% in "a decisive shift" to support industry and unlock the UK's economic potential.
The UK Government also plans to increase support for the most energy-intensive firms, like steel, chemicals, and glass, by covering more of the electricity network charges they normally have to pay through the British industry supercharger. These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%.
Key measures for Wales
The following eight measures have been identified as key for Wales.
More than £4 billion for the advanced manufacturing sector in the UK over the next five years.
UK Government to establish a centre for doctoral training in semiconductors, led by Swansea University.
A defence growth deal cluster to build on Wales's major strengths.
A new British business bank champion for the Cardiff Capital Region to connect investors with businesses and kickstart growth.
£30m for a local innovation partnerships fund in Wales to work with the Welsh Government and Innovate UK to grow innovation.
The National Wealth Fund working with the Development Bank of Wales to identify and secure financing for investment projects in Wales.
Support for the UK's city regions and clusters by increasing the supply of investible sites through a new £600m strategic sites accelerator, enhanced regional support from the office for investment, national wealth fund, and British business bank.
Strengthened support from the office for investment to help identify, shape and deliver strategic investment opportunities across the UK.
Ten year plan
The industrial strategy is a 10-year plan to promote business investment and growth, with the aim of making it "quicker, easier and cheaper to do business in the UK, and to give businesses the confidence to invest and create good, well-paid jobs in thriving industries".
The UK Government's plans says it addresses the main barriers to growth, making it "easier and quicker" to do business and invest in Wales.
The published plan of action is as follows:
Slashing electricity costs by 20-25% to level the playing field for industries like chemicals and key growth sectors like automotive.
Unlocking billions in finance for innovative business by increasing British business bank capacity to £25.6 billion.
Reducing regulatory burdens by cutting the administrative costs of regulation for business by 25% and reduce the number of regulators.
Boosting R&D spending to £22.6 billion per year by 2029-30 to drive innovation across the IS-8, with more than £2 billion for AI over the spending review, and £2.8 billion for advanced manufacturing over the next ten years, in a bid to leverage billions more from private investors.
Attracting elite global talent to key sectors, via visa and migrations reforms and a new the 'global talent taskforce'.
Revolutionising public procurement and reducing barriers for new entrants and SMEs to bolster domestic competitiveness.
What's been said...
Prime minister Keir Starmer said: 'This industrial strategy marks a turning point for Britain's economy and a clear break from the short-termism and sticking plasters of the past.
'In an era of global economic instability, it delivers the long term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people's pockets as part of the plan for change.
'This is how we power Britain's future - by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear - Britain is back and open for business.'
Secretary of State for Wales Jo Stevens said: 'Wales has huge potential and our government's industrial strategy will harness the strengths of our businesses and workforce to drive growth and create jobs.
'The strategy will support key sectors like aerospace and compound semiconductors while developing industries of the future like floating offshore wind where Wales is well-placed to be a world leader. Our modern Industrial Strategy is built to last and make Wales one of the best places to invest and do business. Working alongside Welsh Government we will boost growth, raise wages and create wealth across our country.'
UK Government business and trade secretary Jonathan Reynolds said: 'We've said from day one Britain is back in business under this government, and the £100 billion of investment we've secured in the past year shows our Plan for Change is already delivering for working people.
'Our modern industrial strategy will ensure the UK is the best country to invest and do business, delivering economic growth that puts more money in people's pockets and pays for our NHS, schools and military.
'Not only does this strategy prioritise investment to attract billions for new business sites, cutting-edge research, and better transport links, it will also make our industrial energy prices globally competitive.
'Tackling energy costs and fixing skills has been the single biggest ask of us from businesses and the greatest challenge they've faced – this government has listened, and now we're taking the bold action needed. Government and business working hand in hand to make working people better of is what this government promised and what we will deliver.'
Chairwoman of Fintech Wales, Sarah Williams-Gardener, said: 'We are delighted to see financial services recognised as a key sector in this industrial strategy. We look forward to working closely with the government to help unlock the sector's full potential.
'The emphasis on AI and the compute power required to support its development is particularly welcome, as we begin to see generative AI driving innovation across financial services—empowering both providers and customers through the next generation of digital banking platforms.'
Founding partner of Gambit Corporate Finance and chairman of the Cardiff capital region investment board, Frank Holmes, said: 'Today's announcements mark a timely and important shift towards a connected, strategic approach to economic growth. The renewed focus on industrial strategy and SME finance speaks directly to the opportunities we are unlocking in the Cardiff capital region. We have backed innovative and scalable businesses like Whisper TV, showcasing how tailored regional finance can drive job creation, innovation and global reach.
'The UK's commitment to extending SME access to finance aligns perfectly with the ecosystem we are building in CCR as a proven delivery partner and a model for regional economic development.'
And Louise Harris, CEO of Tramshed Tech in Cardiff, added: "The launch of the UK government's industrial strategy is a pivotal moment for our tech and innovation ecosystem. By aligning local strengths with national ambition, this strategy provides a powerful platform for Welsh businesses to grow, attract investment and lead in emerging sectors such as technology, advanced manufacturing, and creative industries.
Article continues below
'This strategy recognises that innovation isn't just about technology in isolation – it's about creating sustainable, high-quality jobs while tackling real-world challenges. This approach will create the perfect environment for start-ups and scale-ups to thrive, knowing they have both the infrastructure, skills and strategic support to take their innovations from Wales to the world."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
ITV News
30 minutes ago
- ITV News
UK set to commit to boost defence spending to 5% of GDP by 2035
The UK will increase spending on defence and security to 5% of GDP by 2035, the Prime Minister is set to announce at a meeting of Nato leaders. The target, expected to be formally agreed by the 32-nation military alliance at a summit in The Hague this week, includes spending 3.5% on 'core defence' and another 1.5% on 'resilience and security'. It represents a significant jump from the current 2% Nato target, and from the UK Government's aim of spending 2.5% of GDP on defence from 2027 and 3% at some point after the next election. But the figure is in line with the demands of US President Donald Trump, who has called for Nato allies to shoulder more of the burden of European defence. Ahead of his trip to the Netherlands, Starmer said the increased spending target was 'an opportunity to deepen our commitment to Nato and drive greater investment in the nation's wider security and resilience'. He said: 'We must navigate this era of radical uncertainty with agility, speed and a clear-eyed sense of the national interest to deliver security for working people and keep them safe.' The Government expects to spend 1.5% of GDP on resilience and security by 2027. The details of what counts towards that target are due to be set out during this week's summit, but it is likely to include spending on energy and border security as well as intelligence agencies. But increasing core defence spending to 3.5% will not happen until 2035, with at least two elections likely to take place before then. Nor would Downing Street say how the increase would be paid for, with a spokesman describing the figure as 'a projected target' that allies would review in 2029 when Nato carries out its next capability assessment. The Royal United Services Institute has estimated that increasing core defence spending to 3.5% by 2035 would cost £40 billion a year more than keeping the figure at 2.5%. Conservative shadow defence secretary James Cartlidge said the Tories welcomed the higher Nato target, but said the Government's commitment was 'both unfunded and a decade away, when the threat we face is real and imminent.' Sir Keir's announcement came as the Prime Minister prepared to fly to the Netherlands for the two-day Nato summit against the background of both the war in Ukraine and escalating hostilities in the Middle East. Nato secretary-general Mark Rutte described the move to spend more on defence as a 'quantum leap' that would make the organisation 'a stronger, a fairer and a more lethal alliance."
Western Telegraph
38 minutes ago
- Western Telegraph
Starmer to commit to spending 5% of GDP on defence by 2035 at Nato summit
The target, expected to be formally agreed by Nato countries at a summit in The Hague this week, includes spending 3.5% on 'core defence' and another 1.5% on 'resilience and security'. It represents a significant jump from the current 2% Nato target, and from the UK Government's aim of spending 2.5% of GDP on defence from 2027 and 3% at some point after the next election. But the figure is in line with the demands of US President Donald Trump, who has called for Nato allies to shoulder more of the burden of European defence. Ahead of his trip to the Netherlands, Sir Keir Starmer said the increased spending target was 'an opportunity to deepen our commitment to Nato and drive greater investment in the nation's wider security and resilience'. He said: 'We must navigate this era of radical uncertainty with agility, speed and a clear-eyed sense of the national interest to deliver security for working people and keep them safe.' The Government expects to spend 1.5% of GDP on resilience and security by 2027. The details of what counts towards that target are due to be set out during this week's summit, but it is likely to include spending on energy and border security as well as intelligence agencies. But increasing core defence spending to 3.5% will not happen until 2035, with at least two elections likely to take place before then. Nor would Downing Street say how the increase would be paid for, with a spokesman describing the figure as 'a projected target' that allies would review in 2029 when Nato carries out its next capability assessment. The Royal United Services Institute has estimated that increasing core defence spending to 3.5% by 2035 would cost £40 billion a year more than keeping the figure at 2.5%. Conservative shadow defence secretary James Cartlidge said the Tories welcomed the higher Nato target, but said the Government's commitment was 'both unfunded and a decade away, when the threat we face is real and imminent.' He said: 'The Chancellor failed to set a path to 3% in the spending review, and this is another announcement without a plan. 'Instead of using smoke and mirrors to inflate defence spending, Labour must get to 3% this parliament and back our country's defence with a fully funded plan.' Sir Keir's announcement came as the Prime Minister prepared to fly to the Netherlands for the two-day Nato summit against the background of both the war in Ukraine and escalating hostilities in the Middle East. The Prime Minister's official spokesman said Sir Keir would continue to press for a diplomatic solution to the Israel-Iran crisis. Volodymyr Zelensky, who met Sir Keir Starmer at Downing Street on Monday, is also expected to attend the summit (Jeff Moore/PA) He will also urge allies to help secure a 'just and lasting peace' in Ukraine by showing strength and providing Kyiv with 'the support it needs to defend itself against continued Russian aggression'. Ukrainian President Volodymyr Zelensky is also expected to attend the summit, but not take part in the main discussions of the North Atlantic Council. Ahead of the summit, Nato secretary-general Mark Rutte described the move to spend more on defence as a 'quantum leap' that would make the organisation 'a stronger, a fairer and a more lethal alliance'. But it was reported on Sunday that Spain had reached a deal that would see it exempted from the 5% target. Prime Minister Pedro Sanchez said that Spain would be able to keep its commitments to the 32-nation military alliance by spending 2.1% of GDP on defence needs. Tuesday will also see the publication of the UK's national security strategy, which is expected to call for the whole of society to become more resilient and recognise national security 'means more than it used to'. The document will tie together a series of reviews commissioned by the Government, including the recent strategic defence review, a review of the Aukus alliance with the US and Australia and an audit of relations with China.
Scottish Sun
41 minutes ago
- Scottish Sun
Oil prices hit six month high amid supply fears triggered by US attacks on Iran
Reeves said yesterday that the Government was following developments in the conflict very closely OIL PRICE SURGE Oil prices hit six month high amid supply fears triggered by US attacks on Iran OIL prices yesterday hit their highest levels for nearly six months — amid supply fears triggered by the US attacks on Iran. Brent crude surged to as high as $81.40 (£60.50) a barrel in early morning trading before dipping back to $76.76 (£57.05) in the early afternoon. 1 Analysts say crude prices would rocket if Iran blocks oil being shipped through the key Strait of Hormuz Credit: Reuters Analysts say crude prices would rocket if Iran blocks oil being shipped through the key Strait of Hormuz, but so far it has failed to act on its threat. Experts from Panmure Liberum said closing the strait could disrupt about a fifth of global oil and gas shipments. They added that the result could be worse than the oil and gas shock in 2022 after Russia's invasion of Ukraine. The cost of oil has risen sharply since the recent Israel strikes on Iran's nuclear sites, with the US launching an aerial bombing on three facilities over the weekend. Soaring prices would have a knock-on effect for UK households, both at the petrol pumps and through hikes from energy firms forced to pay more for oil imports. Chancellor Rachel Reeves said yesterday that the Government was following developments in the conflict very closely. She told reporters: 'We have seen increases in oil prices in recent days and weeks, which of course will have an impact on the UK economy. "We recognise the challenge that businesses and families face.' KIT ASDA STAY ASDA has scrapped its plans to roll out new staff uniforms next year — with bosses instead focusing on revamping stores and driving down prices. It had planned darker green polo shirts and more breathable fabrics, which would have been the first overhaul in 12 years. Sainsbury's scraps in-store changing rooms leaving shoppers furious Asda said: 'We're focused on getting back on track by lowering prices and excellent service, so have put this change on hold.' SANTAN DARE SANTANDER is to allow millions of homeowners to overpay their mortgages so they can get better deals. The bank told brokers on its hub that those who do so could get access to lower rates if they remortgage or product transfer. Trinity Financial's Aaron Strutt said: 'Lenders tier rates based on equity, so overpaying a small amount could potentially mean borrowers get cheaper rates.' ALDI HIRING 1,000 MORE ALDI is to hire 1,000 new staff by 2026 as it ramps up its supermarkets expansion. The German budget chain yesterday gave an update on its plans to invest around £650million across Britain by the end of the year, which includes opening 40 stores. Aldi, which currently has more than 1,050 UK outlets and 45,000 staff, has a long-term goal of 1,500 stores. A range of new jobs will include store assistants, cleaners and apprentices, as well as management roles. Recruitment director Kelly Stokes said: 'We're excited to bring more people into the Aldi family.' Unlock even more award-winning articles as The Sun launches brand new membership programme - Sun Club.
