The UK government will cut electricity bills by up to 25% for more than 10,000 manufacturers from 2027, expanding support for energy-intensive industries.
The UK government has announced a major expansion of energy cost support for industry, with electricity bills set to fall by up to 25% for more than 10,000 manufacturing businesses starting in April 2027.
The policy, confirmed by Chancellor Rachel Reeves during meetings in Washington, is part of a broader push to strengthen Britain’s economic security and industrial competitiveness amid global instability.
At the center of the plan is an expanded British Industrial Competitiveness Scheme (BICS), which will grow by 40% to include an additional 3,000 businesses. The scheme targets energy-intensive sectors such as automotive, aerospace, steel, and pharmaceuticals — industries that have been particularly affected by high electricity costs.
Under the updated framework, eligible firms will be exempt from key electricity-related charges, including the Renewables Obligation, Feed-in Tariffs, and Capacity Market costs — reducing expenses by an estimated £35–£40 per megawatt-hour. The program is expected to be worth up to £600 million annually once fully implemented.
Crucially, the government emphasized that the changes will not lead to higher energy bills for households or other businesses.
A one-off backdated payment will also be issued in 2027 to cover support companies would have received had the scheme begun in April 2026 — an acknowledgment of prolonged energy price volatility.
Business Secretary Peter Kyle framed the move as a direct response to mounting pressure on industry, calling high electricity costs the “number one issue” facing many firms.
Industry groups broadly welcomed the announcement, with leaders from organizations such as the Confederation of British Industry and the Society of Motor Manufacturers and Traders describing it as a meaningful step toward restoring competitiveness and encouraging investment.
The scheme is expected to be legislated by autumn 2026, following a consultation period that runs through May.
The announcement comes as the UK government seeks to position itself as a stable destination for industrial investment, balancing cost relief for businesses with broader goals of energy transition and economic resilience.
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