On Monday UK Government launched its hotly-awaited Modern Industrial Strategy white paper. We have summarised our views on the key points for the cast metals sector as follows:
The commitments on industrial electricity prices and connection times are clearly positive – but are only the first steps.
-The strategy commits to a British Industrial Competitiveness Scheme to reduce costs by circa £35-40/MWh up to 2030, but only starting in 2027. Who is eligible and the details of the scheme are subject to a consultation that will start ‘shortly’. The scheme will be reviewed in 2030.
-If a foundry is currently eligible for the Supercharger support package, the network charging compensation scheme is being increased by half to 90% from 60%. (This scheme only applies to 300-500 companies nationally but does include some foundries)
-The EII Compensation scheme is being reviewed (in the light of CBAM) but will be continued.
-There is a commitment to make corporate power purchase agreements simpler and easier for industry to access (fewer lawyers or energy intermediaries). There will be a call for evidence to look at this – this is something CMF has been requesting for some time and we think would make a swift and positive difference to many members were it to be adopted
-There will be a new Connections Accelerator Service for demand connections – details to be designed and to follow. A key point here is whether this just encompasses ‘strategic national’ projects (like investment zones, free ports etc) or mid-sized commercial applications to distribution networks from foundries. It is not specified.
-There is a commitment to conclude REMA (the Review of Electricity Market Arrangements) ‘shortly’ but no commitment to zonal pricing or delinking electricity from gas process or similar.
-UK CBAM from 2027 and alignment of UK and EU ETS as expected – nobody wants two different systems, and we have lobbied hard on this topic.
-Commitment to invest £2.5Bn in SMRs (small modular nuclear reactors) but no details of how to engage, and a lot of organisations are involved
There is a welcome addition of ‘foundational industries’ – specifically including materials – to the 8 headline sectors that are the focus of the document. There is also consistent recognition of the importance of supply chains and even ‘sovereign’ and strategic industries and – we were pleasantly surprised to see – ‘established local firms’ – alongside but distinct from multinationals, start ups and SMEs.
-A new ‘Supply Chain Centre’ will be established to help government understand this, to complete a review and make recommendations by the end of 2025. Its aim is to ensure that economic resilience is built into future investment and financial support
-We will argue that foundries fall within the “Advanced Manufacturing” sector as well (this is one of the ‘IS-8’) and there is £4.3Bn targeted at this sector – it formally includes aerospace, automotive, advanced materials (defined as ‘manufacturing of materials using production processes that integrate advanced science and technology’ which we believe covers many CMF members)
There seems to be a contradiction throughout between devolving powers and funds to local regions – which are called ‘city regions and clusters’ throughout; and increased centralisation of activities such as Inward Investment and Business Support, which have historically been delivered regionally.
-There will be a new national ‘Concierge’ service to make investing in the UK easy
-There will be a new Business Growth Service from Summer 2025 (web-based, but with no specific mention of further extension to the WM BEAS grant scheme that we covered in the recent Net Zero Forum)
-There will be a £600M Strategic Sites Accelerator Fund from 2026-27 i.e. to support inward investors who might want special incentives to invest in the UK
-There will be ‘Cluster Champions’ in the British Business Bank – and in general efforts to improve the commercial competence of civil servants – associations will be very valuable here
-£500M for regional innovation funds
There are a number of potentially ‘boring but significant’ mentions of changes to things like public procurement and pensions policy which could potentially be positive (as the funds involved dwarf most of the other initiatives)
-National Procurement Policy instructing public bodies to consider using procurement to support economic growth – i.e., to ask the question can we buy this component in the UK or face possible legal challenges – this links to the new Procurement Act which emphasises the social value of placing orders in the UK, and specifically deprived areas
-Reforming capital markets and pensions policy to support firms that ‘want to stay privately-owned longer’; encourage major pension funds to invest in the UK; and requiring local government pension schemes to look at investing locally and in line with local growth priorities
Metals must be recognised as a national priority.
-The strategy rightly identifies the importance of energy reform, resilient supply chains, and future-facing manufacturing, but stops short of fully recognising the foundational role of the UK metals sector in delivering that vision.
-We are concerned that the strategy fails to meaningfully reference the very materials that underpin those ambitions. The word “metal” appears only once in the full 160-page document. Aluminium, steel, copper, titanium, platinum group metals and other critical metals are absent entirely.
-Without metals, and the foundries to use them, there can be no industrial transformation. With the right recognition and partnership, the UK metals sector can be a cornerstone of our industrial future.
-Government must therefore work closely with industry to ensure that upcoming strategies, particularly the Critical Minerals Strategy, fill these gaps and take a broader, more realistic view of what constitutes a “critical” or “strategic” material.
-The Back British Metals Initiative of which CMF is a founder member calls on government to:
-Recognise metals as critical enablers of industrial resilience, growth and net zero.
-Support investment and policy for sustainable domestic supply chains, including recycling, processing, remelting and advanced fabrication.
-Align the delivery of the Industrial and Critical Minerals Strategies to ensure consistency and long-term impact.
There are also sections on skills, data, tax, planning, and trade all in a similar vein (with broad appreciation of the issues, sensible-sounding ambitions, often with details needing ongoing work, sometimes a slightly centralised or simplistic perspective..). We will look at these in detail in the coming weeks, and will feed back as needed.
Overall, a decent first step – although painfully civil servant speak and energy sector cautious – in broadly the right direction.
Simon Forrester will be interviewing our retained consultant Matthew Rhodes on this topic today, with the video available later in the week.
Next up will be the critical materials strategy, which we anticipate being launched in mid-July. As always, we will be here to update CMF members with the impact on the cast metals sector.
