More big energy users to get help as support plan expanded
Expanded Support for Energy-Heavy Firms to Begin in April 2027
The UK government has announced an expansion of its energy assistance program, set to commence in April of next year. This update follows the initial 2025 proposal and will now cover an additional 3,000 companies, bringing the total to around 10,000 energy-intensive businesses across key industries such as steel production and pharmaceuticals. The initiative aims to reduce electricity costs for these firms by up to 25%, according to officials.
Originally, the scheme was intended to aid 7,000 organizations. The decision to broaden its scope comes amid concerns over rising energy costs, though oil and gas prices have since stabilized after a sharp increase linked to the Iran war. While prices have dipped from their peak, they remain higher than levels seen post-Russia’s invasion of Ukraine.
Industry Response and Government Rationale
Support for the plan was praised by business leaders who highlighted the challenges of high energy expenses. Rain Newton-Smith, head of the Confederation of British Industry, called it “a significant step” and noted that the government had taken feedback into account. However, some industry representatives argue that the current measures fall short of addressing the broader issue, as UK businesses now face electricity costs exceeding those of EU and US competitors by up to double.
“When global instability puts businesses under pressure we’ll always do what’s needed to support them and ensure Britain’s resilience,” stated Peter Kyle, the Business Secretary.
The British Industrial Competitiveness Scheme (BICS), introduced last year, will be the foundation of this expansion. Eligible firms will benefit from a one-time payment in 2027 to offset costs they would have incurred had the scheme started earlier. Additionally, they will be exempt from certain electricity charges funding the net zero transition, which amount to approximately £35–£40 per MWh.
Despite these measures, the Conservatives criticized the plan, stating that sectors like pubs, restaurants, farming, and retail would remain ineligible. They argued that these industries are already struggling with financial pressures. The government maintains that the new plan will bolster economic security and competitiveness by addressing energy costs for high-demand sectors.
Cost and Eligibility Criteria
The expanded program is projected to cost £600 million annually. Businesses can assess their eligibility using the Standard Industrial Classification (SIC) code on the government’s business department website. While the support will not be immediate, it will be rolled out starting in April 2027, with no direct impact on households’ energy bills.
“The plan would only help 0.2% of firms,” remarked Shadow Energy Secretary Claire Coutinho. “A better approach would be to cut green levies to lower electricity costs and stimulate economic growth.”
Business groups acknowledge the move as a positive development, but some stress that more comprehensive action is required to alleviate the burden on a wider range of industries. The British Chambers of Commerce reports that 40% of businesses across all sectors are currently grappling with energy-related financial strain.
