Reeves speech had a giant hole: the sky-high cost of energy for industry | Nils Pratley

"Rachel Reeves' big resetting speech this week set a direction. But then one comes to the elephant in the room: the sky-high cost of energy for UK industry. The fact the UK has some of the highest prices in the developed world would, you'd think, trouble more deeply a chancellor who blames the slowdown in UK productivity since the financial crisis on anaemic levels of investment."

"Those globe-trotting AI firms will be scrutinising electricity costs when choosing where to plant their power-hungry datacentres. Reeves described high energy bills for business as an inherited problem (correct) but the message from half the boardrooms in the land is that the government's response is too timid. Instead of selective tweaks, a mighty yank on the lever is required."

"In terms of a wider effort to reset the cost of energy for the whole of UK industry, or to remove levies that push upwards, there was nothing new. So one can't blame industrial lobby groups for continuing to point out the obvious."

Rachel Reeves outlined a growth strategy focusing on closer EU trade relations, rapid AI adoption, regional tax revenue shifts, and planning reform to remove obstacles. However, the plan inadequately addresses the UK's critically high industrial energy costs, which rank among the developed world's highest. While acknowledging this as an inherited problem, the government's response remains insufficient. The supercharger scheme covers only 500 heavy users, and the British Industrial Competitiveness Scheme for 7,000 firms lacks implementation details. Business leaders emphasize that comprehensive energy cost reduction and supply security require more substantial intervention than the proposed selective measures.

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