Committee publication · Correspondence · 7 July 2026
Letter from the Minister for Industry relating to energy costs and the Industrial strategy, 6 July 2026
From: Business and Trade Committee
Inquiry: Industrial Strategy
Summary
Minister for Industry Chris McDonald responds to the Business and Trade Committee's questions on energy costs and industrial strategy. The Government declines to reopen the Industrial Energy Transformation Fund but announces £470 million in sector-specific support (£350m chemicals, £120m ceramics). It commits to the Energy Independence Bill, outlines progress on breaking the gas-electricity price link through Clean Power 2030, and describes relief measures including the British Industry Supercharger and forthcoming British Industrial Competitiveness Scheme.
Key findings
- IETF will not reopen; 2025 Spending Review settlement did not allow for this, but existing projects continue and inform future policy
- Government announced £120m ceramics funding and £350m Critical Chemicals Resilience Fund in May 2026 to support decarbonisation and competitiveness
- ETS revenues (£3.4bn in 2024-25) are not hypothecated; Government uses them to support spending on decarbonisation and net zero transition
- Government will bring forward detailed proposals later 2026 for legacy low-carbon generators to move to fixed-price contracts; allocation process planned for 2027
- British Industry Supercharger provides 100% exemption from four levies for most intensive firms; British Industrial Competitiveness Scheme will extend exemptions from April 2027
Tone
ProceduralTopics
Key actors
Chris McDonald MP (Minister for Industry), Liam Byrne MP (Chair, Business and Trade Committee), Department for Energy Security & Net Zero, Department for Business and Trade, Ofgem, Office for Budget Responsibility
Notable line
“Our objective is not deindustrialisation, but a stronger, cleaner and more resilient industrial base for the future.”
Key Quotes
“… our 2025 Spending Review settlement did not allow for the reopening of the IETF or similar schemes”
“Britain has already moved from gas setting the price of electricity around 90% of the time in the early 2020s, to around 60% today”
“The British Industry Supercharger gives the most electricity intensive firms a 100 percent exemption from Renewables Obligation, Feed-in Tariffs, Contracts for Difference and Capacity Market costs”
“The closures and job losses the Committee heard about, at Tata Chemicals, Denby and others, are serious”
Source · parliament.uk record ↗