Ed Miliband is focused on establishing a political legacy centered on the transition to net-zero emissions. However, concerns have been raised regarding the impact of current energy policies on UK industry, as high electricity costs have been driving some businesses to halt operations. Industrial ovens are being turned off as companies calculate the rising expenses of powering their factories.
While Miliband inherited a long-standing manufacturing decline, criticisms have emerged regarding the handling of the shift to renewable energy by the current government, as well as previous administrations. The UK’s manufacturing sector has experienced a continual decrease, often exacerbated by currency fluctuations and the influx of cheaper imports. Recent data from the Office for National Statistics (ONS) indicates that output in energy-intensive manufacturing industries hit a 35-year low by the end of 2024, with a one-third decline since the beginning of 2021.
This manufacturing sector encompasses various industries, including paper, chemicals, plastics, processed food, and metals. The ONS has reported that the collective output in these sectors is at its lowest level since 1990. While the drop may contribute positively to carbon emission reduction goals, it raises questions about the future viability of the UK’s industrial base.
Short-term solutions, such as the restoration of pandemic-related subsidies, have been suggested to help offset high energy costs. Factory owners, operating on narrow profit margins, may have to increase prices or reduce production without sufficient financial support. The UK government is contemplating a plan to financially protect the most energy-intensive users, but this may not benefit the broader manufacturing community.
Similar challenges are being faced by German industries, which also contend with high energy prices that have risen since the onset of the Ukraine crisis in 2022. With both the UK and Germany charging significantly higher electricity rates compared to the US, questions arise about long-term strategies for reducing costs.
Miliband has already allocated substantial funds to balance the electricity system, indicating some level of government intervention. However, concerns remain over the effectiveness of proposed regulations for gas plants, which have heavily influenced electricity pricing. The landscape of UK manufacturing hinges on decisive action and a coherent energy strategy to ensure its sustainability.
Source: https://www.theguardian.com/business/2025/oct/18/ed-miliband-needs-a-plan-for-industry-without-it-the-move-to-net-zero-could-ruin-uk-manufacturing