Chancellor Rachel Reeves has announced an expansion of support for energy-intensive UK businesses facing soaring bills due to the Middle East conflict. The British Industrial Competitiveness Scheme (BICS) will now cover 10,000 companies, up from the originally planned 7,000.
The scheme, which cuts electricity bills by up to 25%, will not take effect until next year, but support will be backdated to this month. The Treasury estimates the expanded programme will cost £600 million annually, up from £420 million, with funding details to be outlined in the autumn budget.
Speaking in Washington at the IMF spring meeting, Reeves stated: 'This government has the right plan for the economy: backing British industry, cutting electricity costs and building a stronger, more resilient future.' BICS exempts eligible businesses from three electricity levies: the renewables obligation, feed-in tariffs and the capacity market.
Business groups welcomed the move but expressed concern over the delay. Stephen Phipson of Make UK said: 'Manufacturers are staring down the barrel of huge increases in their energy bills this month... many simply can’t wait until 2027 for relief.' Rain Newton-Smith of the CBI called it 'an important step' but stressed that lasting reform is needed.
Reeves has faced pressure to support consumers and businesses amid surging energy costs linked to the closure of the Strait of Hormuz. She has indicated that household help will be targeted, unlike the broad approach taken after Russia's invasion of Ukraine. The IMF has backed this stance, warning against broad energy subsidies.
