More big energy users to get help as support plan expanded

More Big Energy Users to Get Assistance as Support Plan Widens

The government has announced new support for energy costs, set to begin in April 2027, following the expansion of an initiative initially proposed in 2025. Around 10,000 energy-intensive manufacturers in sectors such as steel production and pharmaceutical manufacturing could see their bills reduced by up to a quarter. The original plan aimed to aid 7,000 firms, but the updated scheme now includes additional companies.

The expansion follows a recent spike in oil and gas prices, though some critics argue the initiative lacks sufficient breadth. The Conservative Party emphasized that sectors like pubs, restaurants, farmers, and retailers—already struggling financially—would not be eligible for the aid. The government stated that broadening the British Industrial Competitiveness Scheme (BICS), introduced last year, would bolster economic security and enhance competitiveness.

“When global instability pressures businesses, we’ll act decisively to support them and ensure Britain’s resilience,” stated Business Secretary Peter Kyle.

The support will not be immediately effective. Starting April 2027, qualifying firms will be exempt from certain electricity charges, which amount to around £35–£40 per MWh, and will also receive a one-time payment in the same month. This payment will cover the support these businesses would have received had BICS been active since April 2026.

The program will be funded via adjustments to the energy framework and government spending, ensuring no additional burden on household energy costs. The conflict in Iran led to a sharp increase in oil and gas prices, though they have not reached the peak levels observed following Russia’s invasion of Ukraine. Gas and oil prices have since declined from their initial highs, as optimism about the conflict’s resolution has increased.

The decision to add 3,000 more firms to the program was praised by business associations, who have long pointed out that high energy costs are a major challenge for UK enterprises. Rain Newton-Smith, CEO of the Confederation for British Industry, called it “a significant step” and noted the government’s responsiveness to industry concerns.

However, some industry representatives contend that further measures are required to address the issue of UK businesses facing electricity costs up to 50% higher than EU counterparts and more than double those in the US. According to the British Chambers of Commerce, 40% of businesses in various sectors are currently grappling with rising energy costs.

The scheme will cost £600 million, with businesses able to check their eligibility using their Standard Industrial Classification (SIC) code on the government’s business department website. Shadow Energy Secretary Claire Coutinho criticized the plan, stating it would benefit just 0.2% of firms and advocating for broader support through reduced living costs and cutting green levies to lower electricity prices.