• Make UK and Ecotricity report finds 90% of manufacturers have seen electricity bills rise since 2022, with 13% warning further price shocks could prove terminal, risking an estimated £85bn hit to the wider economy through lost production.
• Nearly three quarters of manufacturers believe a renewable-led power system offers the route to cheaper electricity, while 71% say net zero is important to their operations.
• Industry is urging the next Government to cut electricity bills, unlock green investment and accelerate reforms towards a cheaper, cleaner energy system.

UK manufacturers are warning that the economy could lose an estimated £85bn a year through reduced industrial output unless the incoming Government acts quickly to tackle industrial electricity prices, according to a new report published today by Make UK in partnership with Ecotricity.

The report, From Crisis to Stability: A Future Energy System for Manufacturers, examines how persistently high and volatile electricity prices are affecting manufacturers and sets out the reforms needed to support growth, profitability and decarbonisation as the UK enters another period of political transition.

Electricity costs putting manufacturers under pressure

The report finds that 90% of manufacturers say their electricity bills have increased at least moderately since 2022, while more than half identify electricity costs as the biggest challenge facing their business over the coming years.

Most concerningly, 13% say further electricity price rises could threaten the survival of their businesses. Make UK estimates that a 13% decline in UK manufacturing activity would result in an annual loss of around £85bn to the wider economy, including approximately £50bn across supply chains.

Rising electricity costs are also rippling through the wider economy, with seven in ten manufacturers passing higher bills on to consumers while squeezed margins continue to delay investment.

According to Make UK, the UK's electricity system is structurally failing manufacturers because gas continues to set wholesale electricity prices too often, policy levies remain loaded onto electricity bills, and slow grid connections, ageing infrastructure and inefficient post-Brexit energy trading arrangements add further cost and complexity.

Industry backs cleaner, cheaper electricity

Despite these pressures, manufacturers remain committed to the transition to net zero and increasingly see it as a route to greater resilience. Almost three quarters believe a renewable-led electricity system offers the path to lower power costs, while 71% say net zero is important to their operations.

The report finds that almost nine in ten manufacturers have already begun or are progressing energy efficiency measures, 63% have taken steps towards electrification, and 87% say they would invest more if the price gap between gas and electricity were reduced.

Make UK is calling for a package of immediate and longer-term measures to reduce industrial electricity costs and unlock investment, including:

• Delivering the British Industrial Competitiveness Scheme this year, rather than from 2027, and extending it to all manufacturers.
• Moving electricity policy levies into general taxation to provide immediate relief.
• Expanding business rates relief for green investment.
• Creating a successor to the Industrial Energy Transformation Fund to support investment in electrification and low-carbon technologies.
• Accelerating structural reform of the electricity market, including credible action to break the link between gas and electricity prices.
• Reforming the grid so it prioritises existing industrial demand, has clearer delivery responsibilities and stronger consequences for poor performance on connections.

Commenting, Stephen Phipson CBE, CEO of Make UK, said:

"High energy costs are one of the biggest threats to the future of manufacturing in the UK. Companies want to invest, innovate and decarbonise, but they cannot do so while electricity prices remain internationally uncompetitive.

"The incoming Government must act quickly, ensuring support reaches the whole manufacturing base while investment decisions are being made now. That means delivering the British Industrial Competitiveness Scheme this year, extending it to all manufacturers, and moving policy costs off electricity bills.

"Manufacturers are not asking for permanent subsidy. They are asking for an energy system that allows them to compete, invest and grow in the UK, at a time when wider business cost burdens have already increased significantly since 2024. Without urgent action, we risk losing industrial capacity that will be extremely difficult to rebuild."

Dale Vince OBE, Founder of Ecotricity, said:

"Ecotricity has been campaigning for years now to end the energy market absurdity that sets the price of all electricity to be the same as that from gas. This 'link' prevents Britain's lower-cost green energy from bringing down energy bills. It ensures that British manufacturers remain exposed to volatile global gas markets, undermining competitiveness for no good reason at all.

"The economic case for reform is clear. During the 2023 energy crisis, breaking this link would have saved UK businesses an estimated £30 billion. Inflation could have been 1.5 percentage points lower, Bank of England interest rates almost one percentage point lower, economic growth 0.6 percentage points higher, and the UK economy £36 billion bigger in GDP terms. The link fundamentally undermines our economy, as well as forcing overpriced energy on us.

"British companies continue to face some of the highest energy costs in Europe. Our next Prime Minister must seize the opportunity to lift this burden from our whole economy and finally 'break the link'."

The report also highlights manufacturers already investing in cleaner energy and greater efficiency, including David Nieper, Schneider Electric and Numatic, through measures such as solar power, electrification, energy efficiency improvements and digital optimisation.

Make UK says these examples demonstrate manufacturers' willingness to invest, but warns business action alone cannot compensate for an energy system that remains too expensive, too volatile and too slow to support industrial transformation.

The report concludes that cheaper, cleaner and more secure electricity is essential to protect UK manufacturing and enable the next phase of industrial decarbonisation.

Read the full report: here