UK to cut green levies to lower energy costs for businesses

The UK government announced plans to cut green levies on thousands of businesses, aiming to reduce soaring energy costs and boost the manufacturing sector, particularly in Labour strongholds.

As part of a new 10-year industrial strategy, the UK government says more than 7,000 businesses will benefit from reduced energy bills through the removal of levies such as the renewables obligation, which currently funds earlier renewable electricity projects. This move is intended to ease the financial burden on companies, especially those in electricity-intensive industries such as steel, aluminium, ceramics, and glass.

In addition, the government will increase discounts on grid connection fees for energy-intensive firms from 60% to 90%, helping around 500 businesses gain faster and more affordable access to power. New measures will also speed up grid connections for major projects expected to create significant jobs, with reforms planned to be in place before year-end.

Prime Minister Keir Starmer described the plan as a “turning point” for the UK economy, emphasizing the need for long-term certainty to encourage investment, innovation, and job creation.

Chancellor Rachel Reeves highlighted that the strategy complements recent spending reviews focusing on infrastructure and technology, ensuring key industries can thrive without increasing costs for taxpayers or households.

The government stressed that these reforms would be funded through changes in the energy system, not by increasing household bills or public spending, aiming to secure a sustainable and competitive future for British businesses.

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