Britain’s metal manufacturing sector faces an existential threat as government-approved energy fees double, potentially wiping out crucial supply chain businesses. Consequently, industry leaders warn that companies supplying defence, automotive, and aerospace sectors may collapse within months.
Energy Fees Double: The Immediate Impact
From October 1, 2025, standing charges and levies on industrial electricity bills begin sharp increases. Importantly, non-commodity costs will constitute up to 65% of total bills. For example, a company paying £300,000 annually will see standing charges jump from £32,000 to £64,000. Additionally, a new Sizewell C nuclear plant levy hits in November.
Industry Leaders Sound Alarm
Stephen Morley, President of the Confederation of British Metalforming, states unequivocally: “We will lose companies over this energy fees double increase.” Meanwhile, Tim Jewitt of Footprint Tools reports his bills nearly doubled even before these hikes. Furthermore, 60% of his energy costs don’t pay for actual electricity.
Government Response and Industry Concerns
The government defends the energy fees double policy as necessary for grid upgrades and energy security. However, energy brokers criticize poor communication of the increases. Liam Conway of Greenfields Energy Group calls it a “bombshell” dropped on businesses. Moreover, thousands of firms remain excluded from Energy Intensive Industries subsidies.
Supply Chain Implications
These businesses form critical links in national supply chains yet shoulder costs that subsidize competitors. Consequently, the energy fees double situation creates unfair competition. Without intervention, ministers concede more closures are inevitable. A British Industrial Competitiveness scheme consultation offers limited immediate relief.
Global Competitiveness at Risk
The energy fees double policy threatens to drive manufacturing offshore, making UK businesses uncompetitive globally. Meanwhile, heavy industries like steel receive protection while smaller manufacturers bear the brunt. Ultimately, the sector warns that net zero goals may come at the cost of having no domestic industry left.
FAQs
When do the energy fee increases take effect?
The initial increases begin October 1, 2025, with full implementation in April 2026.
Which businesses are most affected by the energy fees double?
Metal manufacturers in heat treatments, forgings, and sheet metal production face the greatest risk, particularly those excluded from Energy Intensive Industries subsidies.
What percentage of bills will be non-commodity costs?
Energy brokers project non-commodity costs will reach 65% of total electricity bills after the increases.
Are there any support schemes available?
The government plans a British Industrial Competitiveness scheme, but details remain scarce and implementation timelines uncertain.
How will this affect UK supply chains?
Critical suppliers to defence, automotive, and aerospace sectors warn of business collapses that could disrupt entire supply chains.
What is the government’s justification for the increases?
Officials state the charges fund vital grid upgrades and secure Britain’s energy future through clean, homegrown power generation.
