British manufacturers pay the highest electricity prices in the world
Key Points
- Make UK says UK manufacturers pay the world's highest industrial energy prices
- It blames government policy levies added to electricity bills
- 58% of manufacturers are raising prices and 21% have cut staff
- Transmission network charges are forecast to rise another 23% by April 2027
- Make UK wants levies moved into general taxation at a cost of around £1.6 billion
UK manufacturers pay the world’s highest industrial energy prices, Make UK said in its Autumn Budget submission.
The manufacturers’ organisation, which represents 20,000 companies, blamed government policy charges added to electricity bills rather than global wholesale prices alone.
Make UK said the war in Iran has pushed up oil prices recently. It added that policy levies mean UK firms pay more than overseas competitors regardless of where wholesale prices sit.
According to Make UK, 58% of manufacturers are passing higher costs on to customers through price rises. A further 21% have cut their headcount, and 38% have delayed investment.
More than half of Make UK’s members named energy as their biggest challenge over the coming years.
Network charges set to rise again
Network charges make up the largest part of bills outside the cost of the energy itself, Make UK said. These charges pay for building, running and balancing the national grid.
Industry absorbed a 33% increase in transmission network charges between 2024 and 2025. Make UK said forecasts show these charges rising by another 23% by April 2027.
The Department for Energy Security and Net Zero has said Britain’s grid needs up to £240 billion in upgrades over the next 24 years to meet clean power targets. Make UK said extra levies on electricity bills will fund this work.
What Make UK wants from the Budget
Make UK called on the Government to move policy levies off electricity bills and fund them through general taxation instead.
It said removing the Renewables Obligation, Feed-in Tariff and Climate Change Levy from manufacturers’ bills would cost around £1.6 billion.
The organisation’s modelling found every £10 per megawatt hour cut in manufacturers’ energy bills would add £800 million a year to the economy. It put the direct cost to the Treasury at £750 million a year.
Make UK also wants the British Industrial Competitiveness Scheme, which lowers electricity costs for eligible firms, expanded to all 130,000 UK manufacturers. The scheme currently covers one in 10 manufacturers, and Make UK estimated the expansion would cost up to £3 billion.
The organisation proposed an Electrification Accelerator Fund to help manufacturers switch from fossil fuels to electric technology for industrial heat and power. The Industrial Energy Transformation Fund, which previously supported this switch, has now closed.
