The UK government has announced it will expand the British Industrial Competitiveness Scheme (BICS) to cover 10,000 electricity-intensive manufacturing businesses from 2027. 

In June 2025, the government launched BICS to boost UK industry’s competitiveness by reducing high electricity costs. At the time it said that from April 2027, 7,000 businesses in manufacturing sectors such as automotive, aerospace, steel and pharmaceuticals would see their electricity costs reduced by up to 25%.

Chancellor Rachel Reeves has now announced that the scheme will be expanded to a further 3,000 eligible businesses. A one-off payment in 2027 will cover support firms would have received if BICS had been in place from April 2026.

Reeves said: “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.”

Electricity in the UK is more expensive than in many of its European counterparts. This is largely because the UK is reliant on gas to provide a consistent base load energy supply, and the fuel has been subject to significant market volatility, as is evident by the current conflict in the Middle East. 

British manufacturers in particular have been hit hard by high energy prices. In 2024, UK Steel highlighted how these costs had crippled domestic steel producers, which are paying as much as 50% more than competitors in France and Germany.

BICS targets support at such energy-intensive firms, which will see their electricity bills cut by up to 25% from April 2027. The scheme will also exempt them from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market. 

Reeves said that the government will fund the scheme through a combination of changes within the energy system and Exchequer funding, full details of which will be revealed in the Autumn Budget 2026. She makes it clear that households and other businesses will not bear the costs or see an increase in their energy bills.

The extension of BICS by an additional 40% has been largely welcomed by industry. For instance, Mike Hawes, chief executive of trade body the Society of Motor Manufacturers and Traders, called it a “decisive first step” that answers the industry’s “long-standing calls for energy support” for a critical sector that contributes to the UK economy.

However, others argue that the support could really do with being in place now, with firms facing increased volatility in global energy markets. According to Stephen Phipson, chief executive of Make UK, “manufacturers are staring down the barrel of huge increases in their energy bills” with many not being able to “wait until 2027 for relief”.

Phipson said: “The UK has the highest industrial energy costs in the developed world, which is unsustainable for a manufacturing sector that provides 2.6 million high-skilled high-paid jobs and must compete globally. Failure to provide help now risks substantial job losses and further deindustrialisation of a sector vital for our national security and resilience.”