The UK government has announced plans to reduce electricity bills by up to 25% for more than 10,000 businesses as part of its British Industrial Competitiveness Scheme (BICS), in a move
aimed at strengthening economic security and boosting industrial performance.
The announcement was made by Chancellor Rachel Reeves on April 16 during meetings with the International Monetary Fund in Washington. The government says the initiative will support stability, lower operational costs, and enhance the global competitiveness of British industries.
Under the plan, electricity bills for eligible manufacturers will fall by up to a quarter starting in April 2027. Household and general business energy bills, however, will remain unchanged.
The BICS program will also be expanded by 40%, with an additional one-off payment to around 3,000 more businesses in 2027. This payment will compensate companies that would have received support had the scheme been in effect from April 2026.
Speaking on the announcement, Reeves said the government has “the right plan for the economy,” emphasizing support for domestic industry, lower energy costs, and long-term resilience. She added that the policy would help businesses “compete, succeed, and create quality jobs across the country,” while advancing the UK’s modern industrial strategy.
According to Business Secretary Peter Kyle, sectors set to benefit include automotive, aerospace, metals, and pharmaceuticals. Eligible companies will receive relief from indirect electricity costs tied to renewable obligations, feed-in tariffs, and capacity market mechanisms—amounting to roughly £35–£40 per MWh.
The government estimates the measures could deliver annual savings of up to £600 million starting in 2027.
Funding for the initiative will come from a combination of reforms within the energy system and public spending, with further details expected to be outlined in the UK’s 2026 budget.
