British Industrial Competitiveness Scheme

Chris McDonald Excerpts

Thursday 16th April 2026 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

I am pleased to be able to update the House that the Government are continuing to make progress on delivering a key flagship policy of the industrial strategy. This includes publishing the response to a consultation on eligibility for the British industrial competitiveness scheme, alongside launching a separate consultation on the regulatory changes required to give effect to BICS and its delivery.

As the House is aware, British industries face some of the highest industrial electricity prices in Europe—an issue regularly cited as a barrier to growth and investment in our industrial strategy growth sectors. This has been made even more acute by the current situation in the middle east, and the Government are aware that businesses are concerned by the instability and potential impact on energy prices and supply chains that this has caused. However, BICS is a long-term intervention designed to address Britain’s long-standing competitiveness challenge, and it does so by supporting our key manufacturing frontier industries, as well as the manufacturing foundational industries in their supply chains. This will bring industrial electricity costs for these businesses more closely in line with those in other economies in Europe, helping to level the playing field.

Following consultation, the Government have determined that eligibility for BICS will be based on both standard industrial classification codes, to identify eligible manufacturing sectors, and harmonised system codes, to confirm eligible products. Only businesses with both an eligible SIC and HS code will qualify. Different electricity-intensity thresholds will be applied at the sector level for frontier and foundational manufacturing industries, reflecting their characteristics and ensuring support is targeted to maximise the scheme’s growth and investment impact. The value of support will then be determined at site level, based on the proportion of electricity used for eligible manufacturing activity. The scheme will reduce electricity costs for over 10,000 eligible businesses by up to £40 per megawatt hour.

We also heard that support is needed sooner. While BICS cannot be operationalised earlier due to the regulatory and delivery changes required, the Government announced that they have decided to provide an additional payment in 2027, covering the 2026-27 period, reflecting the support eligible businesses would have received had the scheme been in operation earlier. The Government are clear that this support will be funded through a combination of Exchequer support and by bearing down on costs elsewhere in the energy system, ensuring that no other energy bills will rise as a result of this scheme. My hon. Friend the Exchequer Secretary to the Treasury has also updated the House on specific elements of these funding arrangements today (statement UIN HCWS1519).

The next consultation seeks views on the proposed regulatory changes and scheme delivery. I encourage Members to contact stakeholders in their constituencies to make them aware of the scheme and invite them to respond before the consultation closes on 14 May.

[HCWS1521]