UK losing jobs abroad due to high energy costs, manufacturers and union warn

"Britain faces deindustrialisation unless manufacturers get relief from high energy prices," says an industry group spokesman

Britain’s Prime Minister Keir Starmer visits STARK, a leading defence tech company in Swindon, England, Friday, Jun 5, 2026. Alastair Grant/Pool via REUTERS

Britain is losing manufacturing jobs abroad and risks the loss of major industries due to high energy costs, a manufacturing group and trade union body warned on Monday, urging the government to do more to reduce companies' bills.

Under an industrial strategy launched a year ago, Britain pledged to cut electricity costs for energy-intensive industries by exempting them from certain green levies, and has since said the scheme will be expanded and backdated.

But industry group Make UK said a survey of members showed more than half of firms had seen no benefit from the strategy, while a quarter had moved production abroad or were considering doing so.

"Britain faces deindustrialisation unless manufacturers get relief from high energy prices," said Stephen Phipson, chief executive of Make UK, calling for the scheme to be expanded to the whole industry and rolled out more quickly.

"We cannot afford to be delayed by political upheaval, or by further consultations. For the sake of thousands of jobs across Britain, the Government needs to step in and act now."

Prime Minister Keir Starmer faces discontent among his Labour lawmakers after a series of U-turns and resignations. Some are backing Greater Manchester mayor Andy Burnham for a potential leadership challenge if he returns to parliament in a special election this week.

The Iran war has driven energy prices higher for households and businesses, adding pressure on Starmer as competing pressures - from defence to welfare - strain public finances.

Phipson said extending the scheme to all companies in the sector would cost £3 billion ($4 billion) a year and save 2.5 million jobs.

Trade union federation the Trades Union Congress backed the call for greater relief, with General Secretary Paul Nowak saying the scheme should be expanded to "protect jobs and keep factories and plants running."

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