High energy prices threaten UK’s status as manufacturing power, business groups say
The UK is at risk of losing its status as a major manufacturing centre after a sharp rise in energy prices that has forced about 40% of businesses to cut back investment, according to a report by the CBI and Energy UK.In a stinging message to ministers, the report said British businesses – from chemical producers to pubs and restaurants – were being undermined by a failure to cap prices and upgrade the UK’s ageing gas and electricity networks.A far-reaching review of outmoded regulations that govern the sale and supply of energy is also needed to spur investment and boost economic growth, the report said.Energy UK, which represents more than 100 electricity generators and retailers, said business electricity costs remained 70% higher than before Russia’s invasion of Ukraine, while gas prices were 60% higher.A survey underpinning the report found that almost 90% of firms have seen energy bills rise over the last five years and four in 10 had reduced investment as a result.
Without a reduction in energy bills, “the risk of job losses, production cuts, plant closures and offshoring will increase,” the report said.The CBI and Energy UK said ministers needed to join forces with industry to conduct a comprehensive review of the UK’s energy needs and how they can be met during the transition to net zero.A taskforce made up of researchers from both organisations and industry groups will consider how reforms could reduce prices and improve the efficiency of the gas and electricity networks.The aim is to persuade ministers that initiatives to improve the UK’s energy system have not gone far enough, leaving the UK in danger of widespread deindustrialisation.The UK has some of the most expensive industrial energy prices in the developed world.
They are almost two-thirds above the median of International Energy Agency (IEA) countries and the highest among G7 members,As an indication of the impact, figures covering 2025 show the UK’s trade in goods slumped to its worst performance on record,Britain reported a £248,3bn deficit for goods – £30,5bn more than the previous year.
The Office for National Statistics said the widening gap was only partly filled by a £192bn surplus in services, up £16.4bn from the previous year.Last year the manufacturers’ lobby group, Make UK, said the government should provide millions of pounds in extra subsidies to prevent the industry from shrinking.Louise Hellem, the CBI’s chief economist, said industrial sectors were already suffering severe financial pain from the dramatic rise in energy prices.“You can see it already in the chemicals industry, which has seen several closures,” she said.
Hellem described this year as a “pivotal moment” for the UK’s industrial strategy,Among medium-sized businesses, UK electricity prices are around double the EU median,Nondomestic gas prices are in line with the EU, the report said, but are considerably higher than the likes of the US and Canada,“This acts as a brake on ambitions for economic growth,Also, businesses cannot invest in switching to clean energy – even though they know the long-term benefits of doing so – which again undermines one of the government’s key policies,” the report said.
Energy minister Ed Miliband has sought to protect some of the UK’s biggest users of energy.Last year, the government said it would cut electricity prices by up to £40 a megawatt hour for 7,000 “heavy users” to “move the UK from being an outlier to right in the middle of the pack”.Dhara Vyas, the head of Energy UK, said she was concerned that thousands of businesses outside the ringfence would continue to be hampered by high energy bills.The government had made significant progress on reducing domestic energy costs, she said.But the help on offer for some industrial users was not only “a sticking plaster”, but it was also being funded by other bill payers.
She added: “Lowering prices for all businesses is fundamental to the UK’s growth story.”She said the initial report showed “how high energy costs are holding back the UK economy, and the limits of existing support”.“But our aim will not be just about how to reduce bills.It will be the first of its kind to take a fundamental look at the energy market and the regulations to see how it can become more effective,” she said.
Wales v Scotland: Six Nations rugby union – as it happened
Sarah Rendell’s report has landed so I’ll get out of here.Credit to her for making sense of that. A quick trade secret, most match reports are written with 10 minutes left on the clock. So any change at the death can be a nightmare.The fact that Sarah filed this on time, and with more than a degree of coherence, is a testament to her skills!Thanks for joining me
Russell inspires Scotland to thrilling Six Nations comeback win against Wales
Scotland pulled off a dramatic comeback win against Wales to back up their impressive Calcutta Cup success the previous week. Hosts Wales had the lead until the 74th minute thanks to a spark lit by the wing Josh Adams, leaving the visitors with a feeling that they were lucky to come away with five points, which sent them to the top of the Six Nations table.This was just the third time Scotland have won the match directly after a victory over rivals England in the Six Nations and their second-half resurgence came at the hands of their maverick Finn Russell. Who else could it have been? The fly-half is one of the best in the world and has been the architect of Scotland’s biggest victories over the last few years. He was largely quiet in the first 40 minutes, such was Wales’s impressive start, but two fast-paced tries either scored or created by Russell set Scotland on the comeback path
Borthwick ‘bitterly disappointed’ by latest Six Nations setback against Ireland
Steve Borthwick says England have only themselves to blame for their steep decline in this season’s Six Nations. After his side’s record humbling by Ireland on Saturday, Borthwick said his side are being punished for their poor starts to games and are leaving themselves “a mountain to climb” against quality opposition.This was England’s worst Six Nations defeat since they lost 53-10 at home to France in 2023 and Borthwick said he was “bitterly disappointed” with his team’s latest sub-par first-half showing. “Unfortunately, for two weeks now, we have given the opposition too many points and we have not got scoreboard presence. We will be looking closely at that and how I set the team up to make sure it doesn’t happen again
Borthwick’s plans in shreds as ruthless Ireland heap more misery on England | Michael Aylwin
So it looks as if it might have been a bubble. England’s 12-match winning run came to a shuddering halt last week, but it was possible to believe that flop might prove a one-off – a chastened Scotland at home, after all, has been the downfall of many an England team.Well, there are scattered strips of latex all over Twickenham now, England’s balloon more than spectacularly popped by an Ireland side who are hardly afraid of inspirational rugby against this lot themselves.Just as England had been riding high before last week, so Ireland had been looking a little lacklustre. We thought they might be a team in transition – and they may yet prove to be – but they brought back a whole haberdasher’s worth of experience, led by the peerless Jamison Gibson-Park, and fairly tormented their younger and more hopeful hosts
Jorrit Bergsma wins mass start to continue golden Winter Olympics for 40-somethings
Jorrit Bergsma, the mullet-wearing 40-year-old speed skating legend from the Netherlands, won the men’s mass start on Saturday afternoon for his second medal of the Milano Cortina Games and his first Olympic gold since 2014.Bergsma crossed first in 7:55.50, ahead of Viktor Hald Thorup of Denmark and Andrea Giovannini of Italy, denying American star Jordan Stolz in his bid to become the first man in 32 years to win three long-track speed skating golds at a single Olympics.“Everybody settled for third, honestly. Nobody wanted to get the gold,” said Stolz, the 21-year-old from Wisconsin who captured a pair of golds with Olympic-record times in the 500m and 1000m before Thursday’s silver in the 1500m
England 21-42 Ireland: Six Nations player ratings from Twickenham
Freddie Steward Showed the type of inaccuracy that will infuriate Steve Borthwick more than once and made little or no impact in attack. 5Tommy Freeman A couple of decent moments, but like almost everyone else in white, far from his best day. 6Ollie Lawrence Did his job by bringing power in the carry and clearly positionally superior at No 13 to the Freeman experiment. 6Fraser Dingwall Took his try well, but a defensive error allowed Doris’s skill to expose him. Another very indifferent day
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