, which cuts electricity costs by up to 25% for energy intensive businesses, will be extended from 7,000 to 10,000 manufacturers.){kind=link}
The government’s new British Industrial Competitiveness Scheme (BICS), which cuts electricity costs by up to 25% for energy intensive businesses, will be extended from 7,000 to 10,000 manufacturers.
The initiative, due to launch in April 2027, is focused on high growth industries in England, Scotland and Wales, including automotive and aerospace and foundational sectors in their supply chains, like chemicals.
Eligible businesses will also receive a one-off additional payment in 2027 to cover the support they would have received if BICS had been in place from this month.
The announcement comes as chancellor Rachel Reeves is in Washington to set out Britain’s plan for economic security through the Middle East crisis. She said:
“This government has the right plan for the economy: backing British industry, cutting electricity costs, and building a stronger, more resilient future.
“Today’s announcement will cut energy bills for over 10,000 manufacturers, helping businesses to compete, win and create good jobs across the country, and to deliver our modern industrial strategy.”
Business groups welcomed the expansion of the scheme but said the support does not go far enough.
Ben Martin, policy manager at the British Chambers of Commerce, said:
“The government must go further on supporting businesses with the cost of energy. High energy costs are affecting companies of all sizes and all sectors, not just those classified as the most energy intensive.
“Firms were already struggling with the cost of energy before the escalation of the Middle East conflict in March. Our research, in Q1 of 2026, shows that around half (52%) of businesses were facing pressure to increase their prices because of utility costs. This rises to 60% for manufacturers, and 75% in the hospitality sector.
“A BCC survey, currently in the field, is telling us four out of 10 businesses are now finding it difficult to pay their energy bills. This compares to a quarter (27%) in January.
“Government should fund at least part of the Renewables Obligation on business energy bills, just as it did for households. This would more closely align support for firms with the relief that was announced for domestic energy users in the Autumn Budget.
“As businesses navigate this uncertainty, it is essential that ministers keep talking to them and keep all options on the table in the coming weeks and months.”
Alex Hall-Chen from the Institute of Directors said:
“The UK’s high industrial energy costs are an issue across the economy, not just in manufacturing. Our research shows that 69% of business leaders are concerned about energy price volatility, while 39% cite energy as a major driver of costs in the year ahead, concerns heightened by the conflict in the Middle East.
“This crisis underlines the need for deeper reform of the UK’s energy market, rather than tweaks at the edge. The UK must break the link between electricity and gas prices, while pursuing a pragmatic approach to domestic energy production to deliver long-term security and affordability.
“Greater clarity and action well before 2027 will be essential if businesses are to invest with confidence.”
Gary Smith, general secretary at trade union GMB, said workers in manufacturing sectors not covered by the British Industrial Competitiveness Scheme are “sickened at the lack of support”. He added:
“Gas intensive industries in the UK have been shamefully ignored by the government in this announcement – it’s a total disgrace.
“GMB members grafting in our world-famous ceramics sector and making the bricks that build our nation are sickened at the lack of support.
“Workers in manufacturing companies across the UK need urgent help – this isn’t it.”