Chancellor Rachel Reeves has announced an expansion of support for energy-intensive UK businesses, extending the British Industrial Competitiveness Scheme (BICS) to cover 10,000 companies, up from the 7,000 originally planned. The scheme, which cuts electricity bills by up to 25%, will not be operational until next year, but support will be backdated to this month.
The move comes as businesses face soaring energy costs due to the ongoing Middle East conflict, particularly the closure of the Strait of Hormuz. Reeves, speaking at the IMF spring meeting in Washington, said the government is backing British industry and cutting electricity costs to build a more resilient economy. The Treasury will fund the £600m-a-year scheme through measures to be detailed in the autumn budget.
Business groups welcomed the expansion but criticised the delay in payments. Stephen Phipson of Make UK warned that manufacturers face huge bill increases now and cannot wait until 2027 for relief. Rain Newton-Smith of the CBI called it a significant step but stressed that lasting reform is needed to reduce energy costs for all businesses.
Reeves has faced pressure to address rising costs for both businesses and households. She has indicated that household support will be targeted, avoiding the broad subsidies implemented under Liz Truss following Russia's invasion of Ukraine. The IMF has backed this approach, warning against costly and poorly targeted energy subsidies.
