The UK government has announced a significant expansion of its energy support scheme for energy-intensive industries, promising assistance to approximately 10,000 manufacturers starting in April 2027. This represents a substantial increase from the original plan to aid 7,000 companies.
Business Secretary Peter Kyle stated, "When global instability puts businesses under pressure we'll always do what's needed to support them and ensure Britain's resilience." The initiative, known as the British Industrial Competitiveness Scheme (BICS), aims to reduce electricity costs by up to 25% for eligible firms in sectors including steel, pharmaceuticals, automotive, aerospace, and recycling.
From April 2027, qualifying businesses will be exempt from certain electricity charges related to the net zero transition, valued at approximately £35–£40 per megawatt-hour. Additionally, they will receive a one-off payment in 2027 to compensate for support that would have been available if the scheme had started a year earlier.
The expansion comes in response to recent surges in oil and gas prices, partly driven by geopolitical tensions. While prices have retreated from initial peaks, UK businesses continue to face significantly higher electricity costs compared to European and American competitors.
Rain Newton-Smith, chief executive of the Confederation of British Industry, welcomed the move as "a significant step" demonstrating government responsiveness to business concerns. However, critics argue the £600 million program falls short. The Conservative Party noted that pubs, restaurants, farmers, and retailers remain ineligible despite facing severe financial pressures.
Shadow Energy Secretary Claire Coutinho criticized the limited scope, noting the scheme would assist only 0.2% of UK businesses. She advocated for broader measures, including reducing green levies to lower electricity costs across the economy.
The government confirmed the program will be funded through energy system adjustments and government expenditure, with no impact on household energy bills. Businesses can determine eligibility using their Standard Industrial Classification codes via the government's business department website.