Government cuts electricity bills for 10,000 manufacturers in boost for UK competitiveness

The Government has announced that electricity bills will be cut by up to 25% for over 10,000 businesses through the British Industrial Competitiveness Scheme.

• Chancellor announces bold action on businesses’ electricity bills during IMF meetings in Washington, as Government strengthens Britain’s economic security – helping deliver stability, keeping costs down, and boosting competitiveness.
• Bills cut by up to 25% for over 10,000 manufacturers from April 2027, with no increase to household and business energy bills.
• British Industrial Competitiveness Scheme (BICS) to be expanded by 40%, with one-off additional payment in 2027 rolled out to an extra 3,000 businesses and cover support firms would have received from April 2026.

The Chancellor Rachel Reeves today [16 April] confirmed electricity bill cuts for over 10,000 manufacturers as the next phase of the Government’s plan to boost Britain’s competitiveness.

The final design of the British Industrial Competitiveness Scheme (BICS), first announced in last year’s Modern Industrial Strategy, means the scheme will be expanded to cover an extra 3,000 businesses.

The announcement comes as the Chancellor is in Washington to set out Britain’s plan for economic security through the Middle East crisis — prioritising stability, keeping costs down for families and businesses, taking back control of our energy costs, and going further and faster on our plan for a stronger, more resilient economy.

Chancellor of the Exchequer Rachel Reeves said:

“This Government has the right plan for the economy: backing British industry, cutting electricity costs, and building a stronger, more resilient future.

“Today’s announcement will cut energy bills for over 10,000 manufacturers, helping businesses to compete, win and create good jobs across the country, and to deliver our modern Industrial Strategy.”

Business Secretary Peter Kyle said:

“We are a government of action, and when global instability puts businesses under pressure we’ll always do what’s needed to support them and ensure Britain’s resilience. By extending the reach of BICS by 40 percent, we’re acting decisively to tackle the number one issue that businesses face head-on.

“This is what our Modern Industrial Strategy is all about: giving businesses certainty and stability in an unstable time, and backing Britain’s fastest growing sectors with the support they need to prosper and deliver good jobs right across our communities.”

Automotive and aerospace, steel, and pharmaceuticals are among the sectors where eligible businesses are to benefit from a one-off additional payment in 2027. This will cover the support firms would have received if BICS had been in place from April 2026.

Eligibility has also been expanded by 40%, from 7,000 to over 10,000 businesses. This targets support at energy-intensive firms on the number one issue they face – high electricity costs.

From April 2027, eligible firms will see electricity bills cut by up to 25 percent. Households will see no increase in their bills as a result.

BICS will exempt eligible businesses from the indirect costs of three electricity schemes: the Renewables Obligation, Feed-in Tariffs, and the Capacity Market. This is worth around £35–£40 per MWh.

It is expected to be worth up to £600 million per year from April 2027. Households and other businesses not benefitting will see no increase in their energy bills.

The scheme will be funded through a combination of changes within the energy system and Exchequer funding, with full detail to be set out in Budget 2026.

Shevaun Haviland, Director General of the British Chambers of Commerce said:

“Expanding BICS is the right move to help some firms struggling across the UK. It shows the government has listened to our calls for more energy intensive manufacturing businesses to receive help with the cost of energy.

“This welcome first step will help make more of these firms remain globally competitive. Companies will also be pleased that support will be backdated to April 2026, as we called for, further acknowledging the impact of recent energy cost volatility.”

Sectors that could benefit include 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.

A second consultation on the regulatory changes needed to deliver the scheme closes on 14 May 2026. Legislation is expected to be in place by Autumn 2026.

Please see the Government response to the British Industrial Competitiveness Scheme: consultation on scheme eligibility and approach.

The announcement follows a £420 million boost for around 500 of the UK’s most energy-intensive businesses through the Supercharger, which took effect on 1 April and increased the discount on electricity network charges from 60% to 90% for sectors including steel, cement, glass and chemicals.

Read more latest news from the Government here.

16.04.2026