Thousands more UK manufacturers are set to receive help with soaring energy costs, as the Government expands a support scheme aimed at improving industrial competitiveness.
The revised plan means around 10,000 energy-intensive businesses—including firms in steel, automotive and pharmaceuticals—could see their electricity bills cut by up to 25%. That is an increase from the 7,000 companies originally expected to qualify, bringing an additional 3,000 firms into scope.
The move reflects ongoing concern over the pressure high energy prices continue to place on UK industry. Although oil and gas markets have stabilised somewhat after recent geopolitical shocks, many British businesses are still paying significantly more for energy than competitors in Europe and the US.
At the centre of the changes is the expanded British Industrial Competitiveness Scheme (BICS), first outlined in 2025. From April 2027, eligible businesses will be exempt from certain electricity charges linked to net zero policies—reducing costs by an estimated £35 to £40 per megawatt hour.
To bridge the gap before the scheme fully takes effect, the Government has also confirmed that qualifying firms will receive a one-off payment in 2027 to compensate for support they would otherwise have received from April 2026.
The package is expected to cost around £600 million and, according to ministers, will be funded through broader energy system reforms and government spending rather than through higher household bills. Businesses will be able to check eligibility using their Standard Industrial Classification (SIC) code.
Industry reaction has been broadly positive, with many manufacturers welcoming the additional support after years of elevated energy costs and tighter margins. However, some business groups argue the measures still leave major parts of the economy behind.
Sectors such as hospitality, retail and agriculture remain excluded despite continuing to face significant cost pressures of their own. Critics say that while manufacturers are receiving targeted support, energy affordability remains a much wider issue across the UK economy.
The challenge is substantial. Industry bodies estimate that four in ten UK businesses are still struggling to manage energy bills, underlining how deeply higher costs continue to affect confidence and investment.
For manufacturers, the expanded scheme offers some relief—and potentially a stronger footing against international competitors. But the broader debate over how to reduce energy costs across the economy is far from over.
