Cutting industrial electricity prices is key to powering the North East’s future

In March, Mayor Kim McGuinness set out a bold ambition in her Local Growth Plan to make the North East the home of the green energy revolution. It’s a vision that sets its sights on thousands of good jobs, cleaner air and a stronger economy for generations to come.

However, there is a major barrier holding back our industrial potential – not just in the North East, but across the country. Unlike domestic energy, commercial energy isn’t covered by the government’s price cap, and this means even the cleanest, greenest commercial electricity is costing businesses sky-high rates. The cost of commercial electricity means that factories in Sunderland and across the North East are paying at least 50% more for power than their competitors in Europe. In some cases, UK firms are paying four times as much as manufacturers in the United States. That is not just unfair – it is unsustainable.

When energy is this expensive, it becomes harder for British manufacturers to compete, invest, or even survive. It puts jobs and the communities they support at risk. And it weakens our ability to create a thriving, homegrown green economy, built on clean energy, decent pay, and skilled work.

That’s why the government must act – and act fast. The Trades Union Congress has set out a plan to cut industrial electricity prices and level the playing field with countries like France and Germany. This includes guaranteeing price parity with European competitors, matching their support for network costs, and removing outdated levies that punish energy-intensive industries.

These are practical steps that could slash bills by 30% or more for some employers – a difference worth over £1 million per year for a typical factory. That’s money which could instead be spent on pay rises, training, investment in new technologies, and creating good jobs. The cost to the public purse would be far outweighed by the long-term benefits of a thriving industrial base: stronger growth, higher tax receipts and greater national resilience.

Crucially, this kind of government support must be part of a wider social contract. If taxpayers are helping to power British industry, then industry must also step up and deliver for workers. That means fair wages, secure contracts, safe workplaces, and investment in skills. A leg-up for business must mean a leg-up for their workers.

The North East is already leading the way. From the Energy Central Campus in Blyth to cutting-edge ports on the Tyne, it’s home to the UK’s most advanced offshore wind cluster. 

This region stands ready to deliver the green energy revolution. But without lower industrial electricity prices, we risk watching that revolution power up somewhere else. The government must act now to secure British jobs, and make space for the innovation and growth that will strengthen workers into the future.

First published in the Journal (Newcastle-upon-Tyne), 26 May 2025