More big energy users to get help as support plan expanded
Expanded Energy Support Targets Additional Businesses
The government has pledged additional assistance for energy-heavy industries starting in April 2027, following the announcement of a broadened support initiative initially proposed in 2025. This plan could reduce energy costs for approximately 10,000 manufacturers in key sectors like automotive and pharmaceuticals by up to a quarter. Initially, the scheme aimed to aid 7,000 firms, but its scope has now grown to address a wider range of energy-intensive operations.
Response to Rising Energy Costs
This expansion follows a recent spike in oil and gas prices, though the cost increases have not matched those seen after Russia’s invasion of Ukraine. Prices for both gas and oil have since eased from their peak as optimism about the resolution of the Iran conflict grew. The government argues that the revised British Industrial Competitiveness Scheme (BICS) will safeguard economic resilience and enhance competitiveness amid global instability.
“When global instability puts businesses under pressure, we’ll always do what’s needed to support them and ensure Britain’s resilience,” said Business Secretary Peter Kyle.
Nevertheless, the assistance won’t be available immediately. Starting in April 2027, qualifying businesses will receive exemptions from certain electricity charges that fund the net zero transition, valued at around £35–£40 per MWh. They will also be granted a one-time payment in 2027 to offset the support they would have received had BICS been active from April 2026.
Industry representatives, however, pointed out that further action is necessary to tackle the challenge of UK businesses paying up to 50% more for electricity than EU competitors and more than double the rate charged to U.S. companies. Despite this, the decision to add 3,000 more firms to the program has been praised by business groups, who have long highlighted high energy costs as a major barrier to growth. Rain Newton-Smith, CEO of the Confederation of British Industry, called it “a significant step” and noted the government had shown responsiveness to industry concerns.
The initiative is set to be financed via adjustments to the energy system and government spending, with no effect on households’ bills. The plan will cost £600 million, and businesses can check their eligibility using their Standard Industrial Classification code on the government business department website. Critics, including Shadow Energy Secretary Claire Coutinho, argued that the plan would benefit only 0.2% of firms and suggested cutting green levies could better lower energy prices for a broader range of companies.
