Britain’s industrial decline risks accelerating after the Budget failed to tackle crippling energy costs, Ineos has warned, as manufacturers accused the Government of undermining its pledge to rebuild the country’s industrial base.
The chemicals giant described the Chancellor’s measures as a “major missed opportunity to save British manufacturing”, arguing that modest reductions in electricity costs would do little to address the punitive gas prices and carbon taxes facing British factories.
The warning exposes a growing divide between the Government’s promises to reindustrialise Britain and the immediate demands of businesses struggling to remain competitive against overseas rivals.
With winter approaching, the Chancellor announced £100 in energy support for more than 20 million households, extended a VAT cut on domestic electricity and scrapped standing charges on gas bills.
For industry, the Government confirmed that the British Industrial Competitiveness Scheme would reduce electricity bills for 10,000 eligible businesses. Wider energy reforms, however, were deferred, with further action promised in the “months and years ahead”.
For manufacturers facing immediate cost pressures, that timetable was met with frustration.
Ineos said Britain’s industrial base was being destroyed by some of the highest energy costs in the world, warning that factories were closing, skilled jobs were disappearing and investment was moving overseas.
“Reducing electricity costs is welcome, but it barely scratches the surface,” a company spokesman said.
The company argued that British chemical manufacturers were being crippled by gas prices and carbon taxes that competitors abroad did not face. It called for the North Sea windfall tax to be scrapped, insisting Britain should make greater use of its domestic energy resources rather than depend on imports.
“The Chancellor had an opportunity today to reverse Britain’s industrial decline. Instead, this Budget risks accelerating it,” Ineos warned.
The criticism was echoed by Make UK, the manufacturers’ trade association, which said energy bills remained the industry’s biggest concern.
Chief executive Stephen Phipson said high industrial electricity costs were having a “ruinous effect” on investment, warning that reindustrialisation would be impossible without urgent action.
He said the Budget had failed its first major test of the Government’s pledge to rebuild British manufacturing, despite the sector supporting 2.6 million jobs and accounting for 42 per cent of UK exports.
Unite general secretary Sharon Graham also criticised the measures as “baby steps”, arguing that workers needed immediate financial relief alongside a credible plan for investment and jobs.
She welcomed the household energy support but warned that bills were forecast to rise by more than £400 in January.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said the £100 payment would “barely dent” rising costs and questioned whether money paid directly into bank accounts would necessarily be spent on heating.
He called for substantial immediate assistance and a long-term strategy to reduce dependence on gas and heating oil.
The Budget has therefore delivered targeted relief without resolving the deeper question facing British industry: whether manufacturers can compete internationally while energy costs remain so high.
For Ineos and other industrial employers, promises of future reform may offer little comfort if investment, production and skilled jobs continue to move abroad before those changes arrive.
Leave a Comment