More big energy users to get help as support plan expanded
TL;DR
The UK government is expanding its energy support scheme to include around 10,000 energy-intensive manufacturers starting April next year, allowing for bill reductions of up to 25%. This move aims to address rising oil and gas prices but has faced criticism for excluding other struggling sectors.
Key points
- UK government expands energy support scheme for businesses
- Around 10,000 manufacturers could see bills cut by up to 25%
- Scheme originally aimed to support 7,000 firms
- Critics say support does not extend far enough
- Excludes sectors like pubs, restaurants, and retailers
Mentioned in this story
More businesses have been promised help with their energy bills from April next year, after the government announced it was expanding a support scheme first outlined in 2025.
Around 10,000 energy-intensive manufacturers in sectors such as steel and pharmaceuticals could see their bills cut by up to 25%. The scheme originally aimed to support 7,000 firms.
The move is a response to the recent surge in oil and gas prices, but critics said it did not go far enough.
The Conservative Party said pubs, restaurants, farmers and retailers, who were "already on their knees" would not be eligible for the support.
The government said expanding the British Industrial Competitiveness Scheme (BICS) which it drew up last year, would strengthen Britain's economic security and boost competitiveness.
"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.
However the support will not be immediately available.
From April 2027 eligible firms will be exempt from some electricity charges that finance the net zero transition, worth around £35–£40 per MWh. Qualifying businesses will also receive a one-off payment in 2027 that will cover the support they would have received if BICS had been in place from April 2026, the government said.
The scheme will be funded through changes to the energy system and government expenditure, with no impact on domestic bills.
The start of the war in Iran pushed oil and gas prices sharply higher, though they did not reach the same levels as during the aftermath of Russia's invasion of Ukraine. Both gas and oil prices have fallen back from initial peaks, as hopes for an end to the conflict have grown.
The government's decision to expand the scheme to include a further 3,000 companies was welcomed by business groups who have long identified high energy costs as a major handicap for UK business.
The Confederation for British Industry's chief executive Rain Newton-Smith said it was "a significant step" and showed the government had been listening.
The scheme is designed to support firms that are high energy users in sectors such as automotive and aerospace, steel producers, metal fabricators, pharmaceutical and medical supplies companies, recycling businesses, plastic producers, nuclear fuel processors, and cooling and ventilation equipment manufacturers, the government said.
However, other industry spokespeople said that more needed to be done to address a problem that sees UK businesses of all sizes and types paying up to 50% more for electricity than competitors in the EU and more than double the rate US businesses pay.
The British Chambers of Commerce says four in 10 businesses across all sectors are struggling with energy bills.
The scheme will cost £600m and businesses will be able to find out whether they are eligible using their Standard Industrial classification code on the government business department website.
Shadow energy secretary Claire Coutinho said the plan would only help 0.2% of firms and that a better approach to support a wider range of businesses would be to reduce the cost of living and boost economic growth by axing green levies to make electricity cheaper.
Q&A
Which sectors will benefit from the expanded energy support scheme in the UK?
The expanded scheme will benefit energy-intensive manufacturers in sectors such as steel and pharmaceuticals.
What is the British Industrial Competitiveness Scheme (BICS)?
The BICS is a government initiative designed to support energy-intensive industries and enhance Britain's economic security.
Why are some businesses excluded from the UK energy support scheme?
Critics argue that businesses like pubs, restaurants, farmers, and retailers are excluded despite facing significant challenges, as the scheme primarily targets manufacturers.
