The 海角视频 Government has unveiled plans to reduce electricity costs for the steel industry by 25%, providing a significant boost to the upcoming electric arc furnace at Port Talbot steelworks in its new industrial strategy that promises to create tens of thousands of new jobs in Wales.
In a ten-year strategy the Westminster government aims to decrease energy costs for approximately 7,000 businesses nationwide, addressing the issue of high energy costs that have been affecting companies across the 海角视频.
As part of the strategy the 海角视频 Government is backing the establishment of a centre for doctoral training in semiconductors, led by Swansea University, building on the wider sector across south Wales. |It has committed £10m in financial support towards the project.
The industrial strategy is focused on boosting the productivity and competitiveness of targeted sectors of digital and technologies, including compound semiconductors, advanced manufacturing , clean energy industries, creative industries, defence, digital, financial services, life sciences and professional and business services.
With targeted actions it also aims to unlock billions in private sector investment in Wales.
A central theme is increasing support for the most energy-intensive firms — like steel, chemicals, and glass — by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger. These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%.
According to Business Secretary Jonathan Reynolds, the new Tata furnace at Port Talbot, slated to begin operations in 2028, will be among the beneficiaries of this initiative. The 'British industrial competitiveness scheme' is designed to lower electricity costs by up to £40 per megawatt hour for over 7,000 energy-intensive businesses in various manufacturing sectors, including automotive, aerospace, and chemicals.
By exempting these firms, which support over 300,000 skilled jobs across the 海角视频, from paying levies such as the renewables obligation, feed-in tariffs, and the capacity market, the government seeks to "level the playing field and make them more internationally competitive".
It also aims to foster a new partnership between business and government, making Wales and the 海角视频 an ideal location for starting and scaling up businesses.
It says its measures will "forge a new relationship between business and government, making Wales and the 海角视频 the best place to start and scale up a business".
The strategy promises to "unlock growth across Wales" by leveraging the nation's prowess in sectors like aerospace in the north to the inaugural compound semiconductor cluster in the south.
The announcement highlights that over 7,000 海角视频 businesses are posed to benefit from a reduction of up to 25% in electricity bills, marking "a decisive shift" towards supporting industry and realising the country's economic potential.
The industrial strategy unfolds as a decade-long roadmap championing business investment and advancement with the objective to make it "quicker, easier and cheaper to do business in the 海角视频, and to give businesses the confidence to invest and create good, well-paid jobs in thriving industries".
The 海角视频 Government's proposition contends that it confronts major growth impediments, aiming to simplify and accelerate business operations and investments in Wales.
Outlined actions consist of:.
- Slashing electricity costs by 20-25% to level the playing field for industries like chemicals and key growth sectors like automotive.
- Unlocking billions in finance for innovative business by increasing British business bank capacity to £25.6bn
- Reducing regulatory burdens by cutting the administrative costs of regulation for business by 25% and reduce the number of regulators.
- Boosting R&D spending to £22.6bn per year by 2029-30 to drive innovation across the IS-8, with more than £2 billion for AI over the spending review, and £2.8 bn for advanced manufacturing over the next ten years, in a bid to leverage billions more from private investors.
- Attracting elite global talent to key sectors, via visa and migrations reforms and a new the 'global talent taskforce'.
- Revolutionising public procurement and reducing barriers for new entrants and SMEs to bolster domestic competitiveness.
Prime Minister Keir Starmer stated: "This industrial strategy marks a turning point for Britain's economy and a clear break from the short-termism and sticking plasters of the past.
"In an era of global economic instability, it delivers the long term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people's pockets as part of the plan for change.
"This is how we power Britain's future - by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear - Britain is back and open for business."
Jo Stevens, Secretary of State for Wales, said: "Wales has huge potential and our government's industrial strategy will harness the strengths of our businesses and workforce to drive growth and create jobs."
She further elaborated on the strategic focus areas: "The strategy will support key sectors like aerospace and compound semiconductors while developing industries of the future like floating offshore wind where Wales is well-placed to be a world leader. Our modern Industrial Strategy is built to last and make Wales one of the best places to invest and do business. Working alongside Welsh Government we will boost growth, raise wages and create wealth across our country."
Business Editor Sion Barry on the industrial strategy
It has been eagerly anticipated and the 海角视频 Labour Government is hoping it will set the 海角视频 economy on a path to sustained growth.
The publication of its industrial strategy hits all the right notes around stimulating growth in key sectors and leveraging private capital. In Wales, the 海角视频 Government says it has the potential to create tens of thousands of new jobs over the next decade.
The eight sectors identified by Sir Keir Starmer’s government are sensible and cover a wide swathe of the 海角视频 economy — from creative industries and renewables to digital technology and advanced manufacturing. It is not a strategy that will support all businesses, but it targets sectors deemed to have the greatest potential for expansion, job creation, and improving the 海角视频’s woeful productivity levels.
However, like all long-term strategies, it needs to be flexible, with the ability to pivot if domestic or international conditions change.
The headline-grabbing elements include support for the most energy-intensive firms by reducing their electricity bills. This is to be welcomed, but of more immediate concern for a company that will benefit — Tata Steel — is whether a tariff deal between the US and the 海角视频 can give Port Talbot an exemption until the £1.2bn electric arc furnace becomes operational in 2028.
With the ending of blast furnace virgin steelmaking in the lead-up to the electric arc furnace, Tata is importing slab steel from India and the Netherlands, which is then rolled for its downstream operations.
While negotiations continue, a US condition is understood to apply only to melt-and-poured steelmaking — which is no longer the case at Port Talbot. The 海角视频 Government also needs to tighten up quotas, as the EU has already done, to limit levels of imported steel, particularly with overseas producers now seeking new markets due to the high tariffs imposed by Donald Trump.
An industrial strategy was shunned by former Prime Minister Rishi Sunak, perhaps due to an inherent political aversion to state-driven, top-down economics.
But this is a strategy forged in partnership with the private sector.
The phrase world class is often misused, but Wales does have a market advantage with its emerging compound semiconductor cluster in South Wales, which now employs well over 2,000 well-paid people and generates an annual economic output of £400m.
The impact of the industrial strategy will have to be judged over the long term and beyond the short-termism of election cycles.
The 海角视频 now has a plan and needs governments in both Cardiff Bay and Westminster to listen to the private sector, on which its success or failure ultimately hinges.
Jonathan Reynolds, 海角视频 Government business and trade secretary, stated: "We've said from day one Britain is back in business under this government, and the £100 billion of investment we've secured in the past year shows our Plan for Change is already delivering for working people.
"Our modern industrial strategy will ensure the 海角视频 is the best country to invest and do business, delivering economic growth that puts more money in people's pockets and pays for our NHS, schools and military.
"Not only does this strategy prioritise investment to attract billions for new business sites, cutting-edge research, and better transport links, it will also make our industrial energy prices globally competitive.
"Tackling energy costs and fixing skills has been the single biggest ask of us from businesses and the greatest challenge they've faced – this government has listened, and now we're taking the bold action needed. Government and business working hand in hand to make working people better off is what this government promised and what we will deliver."
In Wales the strategy promises to:
- 海角视频 Government to establish a centre for doctoral training in semiconductors, led by Swansea University, building on the world-leading cluster based in south Wales.
- A Defence Growth Deal cluster to build on Wales’s major strengths. The top five Ministry of Defence suppliers all have a footprint in Wales.
- A new British Business Bank champion for the Cardiff Capital Region to connect investors with businesses and kickstart growth.
- £30m for a Local Innovation Partnerships Fund in Wales to work with the Welsh Government and Innovate 海角视频 to grow innovation.
- The National Wealth Fund working with the Development Bank of Wales to identify and secure financing for investment projects in Wales.
- Support for the 海角视频’s city regions (including those in Wales) and clusters by increasing the supply of investible sites through a new £600m Strategic Sites Accelerator, enhanced regional support from the Office for Investment, National Wealth Fund, and British Business Bank, and more.
- Strengthened support from the Office for Investment to help identify, shape and deliver strategic investment opportunities across the 海角视频.
- More than £4bn for the advanced manufacturing sector in the 海角视频 over the next 5 years. Wales has a leading advanced manufacturing sector with companies such as Airbus based in Broughton in north Wales.
Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning said: "The Welsh Government has worked with the 海角视频 Government in shaping the new industrial strategy and ensuring that Wales is pivotal to its delivery.
"Wales has always punched above its weight — and with our strengths in clean energy, defence, and advanced manufacturing, we are well placed to seize the opportunities that lie ahead in high-growth sectors and ensure quality jobs continue to grow in Wales.
"We welcome the commitment to making it easier for the private sector to invest here, as well as the cut to electricity costs for manufacturers in our growth sectors.
"This clarity of ambition — combining state backing with business investment — is exactly what’s needed to unlock growth across our communities.
"All eight key growth sectors — advanced manufacturing, clean energy, creative industries, defence, digital and tech, financial services, life sciences, and professional business services — are primed to grow in Wales.
"This is about jobs, innovation, and resilience for the long term.
"This is what a government serious about Wales’ future looks like — focused on delivery, rooted in fairness, and ambitious for what our nation can achieve."
Sarah Williams-Gardener, chairwoman of Fintech Wales, stated: "We are delighted to see financial services recognised as a key sector in this industrial strategy. We look forward to working closely with the government to help unlock the sector's full potential.
"The emphasis on AI and the compute power required to support its development is particularly welcome, as we begin to see generative AI driving innovation across financial services-empowering both providers and customers through the next generation of digital banking platforms."
Frank Holmes, founding partner of Gambit Corporate Finance and chairman of the Cardiff capital region investment board, commented on the recent developments:."
Today's announcements mark a timely and important shift towards a connected, strategic approach to economic growth. The renewed focus on industrial strategy and SME finance speaks directly to the opportunities we are unlocking in the Cardiff capital region. We have backed innovative and scalable businesses like Whisper TV, showcasing how tailored regional finance can drive job creation, innovation and global reach.
"The 海角视频's commitment to extending SME access to finance aligns perfectly with the ecosystem we are building in CCR as a proven delivery partner and a model for regional economic development."
Gus Williams, interim chief executive at Chambers Wales South East, South West and Mid, said: “The first release of the Industrial Strategy hits the right notes and reflects many of the issues we have raised with government through Chambers Wales South East, South West and Mid and the British Chambers of Commerce.
“Although overall productivity in Wales doesn’t look to have improved over the past decade, in manufacturing it is a very different story where there have been significant improvements in productivity, so it is good to see this being recognised. Support for the advanced manufacturing sector is positive news.
“The high cost of energy for large commercial users is also recognised as something that severely hampers our competitiveness, and we have lobbied hard for this to be seriously addressed, so it is good to see this at the forefront of government announcements this morning. Support for the renewable and defence sectors should also have a positive impact in Wales, along with the life sciences and creative industries where Wales has some fantastic businesses.
“The initial release also recognises issues with skills, particularly in construction which is a huge bottleneck to getting things built here in Wales and solving housing issues. At the chamber we work closely with both the 海角视频 and Welsh governments on international trade so again it is good to see ongoing support for exporters to grow their businesses.
“The beginnings of a long-term coherent approach to supporting business is something we have sorely missed so it is good to see the initial steps being taken and we look forward to working with the 海角视频 and Welsh Governments to make further progress on these issues.”