PwC has welcomed the UK’s newly released Industrial Strategy which will see measures introduced to reduce energy costs for manufacturers, Kallanish learns from a note.
Cara Haffey, manufacturing leader at PwC, says the changes announced are a “game-changer for manufacturers across the country”, noting the extremely high energy costs domestic producers face.
Changes include increasing network charging compensation to 90% and the continuation of the indirect compensation scheme, as well as certain exemptions for energy-intensive businesses such as steel.
In the same note, Vicky Parker, energy, utilities and resources leader at PwC, highlights the announcement as timely, given that “energy will continue to be heavily influenced by geopolitical events and an increasingly complex global economic landscape”.
“By addressing two of the most pressing challenges – high electricity prices and prolonged grid connection waits – this initiative demonstrates a strong commitment to fostering an environment where businesses can have the support to grow and compete internationally,” she notes.
Policymakers will “no doubt be watching ongoing geopolitical events, particularly in relation to oil prices, with the Brent price rising to a five-month high over the weekend, having now stabilised,” Parker adds.
“If prices were to spike considerably, this would raise questions over the overall policy affordability and reignite the ongoing debate as to how to ensure the UK manages its exposure to ongoing volatility in energy costs,” she continues.
Meanwhile, Matt Alabaster, partner at PwC, notes “chronic underinvestment” as the root cause for the country’s “stagnating productivity and sluggish wage growth”, highlighting a £2 trillion investment deficit compared to other G7 countries.
“A long-term industrial strategy, backed by business and delivered consistently by government, is a vital first step. But let’s be clear: the money won’t come from down the back of the UK’s sofa. Government capital spending, while welcome, only scratches the surface – its annual increase covers just 67 days of the levels of investment the UK has lost,” he concludes.
Carrie Bone UK
