Government Reduces Electricity Costs for Thousands of Manufacturers and Expands Finance Access

The government has launched measures to reduce electricity bills for over 7,000 British manufacturers by up to 25 percent and enhance access to finance through a £4 billion plan by the British Business Bank. The initiatives aim to address key challenges faced by UK businesses.

Business Secretary Outlines Industrial Support at CBI Conference

Business and Trade Secretary Peter Kyle presented the government’s strategy at the CBI’s annual conference in London, highlighting support for businesses in high growth and foundational sectors. He announced an eight-week consultation for the British Industrial Competitiveness Scheme (BICS), which will determine eligibility and implement key elements of the modern Industrial Strategy.

The scheme is set to reduce energy prices for thousands of businesses from April 2027, focusing on industries such as automotive and aerospace, as well as supply chain sectors including chemicals. Current British industrial electricity prices are among the highest in the G7, affecting global competitiveness.

British Business Bank to Increase Investment

In addition to energy support, the Business Secretary unveiled a new five-year plan for the government-owned British Business Bank. The plan aims to accelerate investment in domestic scale-ups, particularly in Industrial Strategy sectors, with a £4 billion funding boost. Over five years, the Bank’s activities are projected to support 180,000 UK businesses, create 370,000 jobs, and contribute £68 billion in gross value added to the economy.

Peter Kyle stated that high electricity costs and limited access to finance have constrained growth and innovation among UK businesses. He emphasized that the government’s actions mark the start of further measures to address business challenges and strengthen the industrial base.

Energy Costs Remain a Primary Concern

Surveys indicate that energy costs are a dominant concern for UK manufacturers. In the 2025 Executive survey by Make UK and PWC, 65 percent of respondents identified high energy prices as limiting their competitiveness. Similarly, 64 percent of businesses in the Adam Smith Institute’s business confidence survey reported energy costs as a major concern.

BICS aims to reduce eligible companies’ electricity bills by approximately £35-£40 per megawatt hour, or up to 25 percent. The scheme aligns with broader government efforts to ensure affordable power for businesses and households, complementing proposals from DESNZ consultations on RO/FiT indexation.

Ongoing Industrial Support

BICS follows enhancements to the British Industry Supercharger scheme announced last month, set to launch in 2026. The scheme will increase discounts on electricity network charges for sectors such as steel, cement, and glass from 60 to 90 percent.

CBI Chief Economist Louise Hellem welcomed the consultation, noting that high energy prices pose barriers to investment. She emphasized the importance of clear eligibility rules, delivery mechanisms, and funding streams to reduce the industrial electricity price gap between the UK and other G7 nations.

Kevin Craven, CEO of ADS, highlighted the relevance of these measures to the aerospace sector and expressed support for government efforts to improve access to finance. Ben Martin, Policy Manager at the British Chambers of Commerce, described the scheme as a positive step that will provide certainty for energy-intensive businesses and help them plan for future costs.