Make UK and the Trades Union Congress have warned that high industrial electricity costs are weakening the UK manufacturing base, with companies delaying investment, protecting cashflow, and reassessing where production should sit.
The warning follows a new survey from Make UK, which found that a quarter of manufacturers have either moved activity out of the UK or are considering doing so because of electricity costs. The organisations are calling for urgent Government action, arguing that current and planned support measures are too narrow and too slow to prevent further damage to industrial capacity.
Energy-intensive producers have long carried the sharpest exposure to power prices, particularly in steel, glass, ceramics, chemicals, paper, and other continuous-process industries. The latest intervention widens the concern, however, because smaller engineering companies, fabricators, component suppliers, electronics manufacturers, food producers, and machinery builders are also seeing electricity costs absorb capital that would otherwise be used for equipment, recruitment, automation, and site upgrades.
Stephen Phipson, Chief Executive of Make UK, said: “Britain is now facing the very real prospect of deindustrialisation unless urgent action is taken to address the cost of energy. Manufacturers are being forced to make impossible decisions between protecting jobs, investing for the future and keeping their operations in the UK.”
The TUC has backed the call, framing industrial energy prices as a jobs, skills, and national capacity issue. Production moves do not happen casually, because relocation disrupts qualified processes, customer approvals, tooling, logistics, supplier relationships, and the skills base around a site. When companies still conclude that overseas production may offer the safer route, the pressure has already moved beyond a short-term margin squeeze.
The Government’s British Industrial Competitiveness Scheme is designed to reduce electricity costs for eligible energy-intensive businesses, although many manufacturers will not receive the full benefit until 2027. Others fall outside the eligibility threshold entirely. At a point when borrowing remains expensive and demand is uneven, that gap leaves companies planning investment decisions against uncertain operating costs.
Energy pricing has become a direct measure of industrial competitiveness. UK manufacturers compete with European and US rivals that may have lower power prices, stronger long-term cost visibility, or more substantial state-backed relief. A sustained gap in electricity costs can decide whether a production line remains viable in Britain, even when the workforce, technical capability, and customer base are already in place.
The pressure also complicates decarbonisation. Manufacturers are being asked to electrify heat, install more efficient equipment, reduce emissions, and shift processes away from fossil fuel dependence. Those investments rely on confidence that electricity will be affordable enough to support the business case. High power costs therefore risk slowing the same industrial transition that policy is trying to accelerate.
Energy security has already become inseparable from factory control, resilience, and investment planning, as explored in the growing link between energy security and the industrial control room. Make UK’s latest warning adds the location of production to that list. Electricity costs now influence whether a company upgrades a UK plant, freezes expansion, or moves work elsewhere.
Manufacturing decline can become self-reinforcing once it begins. When production leaves, associated tooling, maintenance work, apprenticeships, local supply contracts, and engineering know-how often follow. The loss is not limited to output on a balance sheet; it weakens the wider ecosystem that makes future investment easier to justify.
The immediate burden falls on manufacturers trying to protect jobs and margins while keeping sites competitive. The larger test sits with industrial policy. Without a faster route to internationally competitive electricity costs, the UK risks asking manufacturers to modernise, decarbonise, and expand from an operating base that its rivals do not have to carry.
