Draft Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026

Luke Evans Excerpts

Tuesday 27th October 2026 General Committees

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dowd. It is also a pleasure to be opposite the Minister. We last met at MIRA in my constituency to talk about some of these issues that affect the automotive industry. He will be pleased to hear that I will not be dividing the Committee, as it is welcome news that the Government are looking at ways to reduce costs on businesses.

That being said, there are some fundamental questions about the regulations that need to be raised. The Government have correctly identified high energy costs as a major obstacle to British manufacturing, but their response seems to be to create a complicated system of exemptions that help selected businesses while leaving the majority facing uncompetitive costs. In essence, we need cheaper electricity for British industry in its entirety, so why are we effectively creating winners and losers, leaving the underlying problem unresolved?

The question is: who ultimately pays? There is legitimate concern that households or businesses that are excluded from the scheme may face higher costs. Also, why are so many businesses excluded? The eligibility rules favour selected manufacturing sectors, leaving other businesses to face higher energy bills. Why is the scheme unnecessarily complicated, with several tiers setting out the percentage a business can claim back? And fundamentally, does it address the real underlying problem?

The Minister has again pointed out that we have high industrial costs, some of the highest in the world. If BICS carves selected manufacturing out of existing electricity policy costs, that is welcome for them, and the Minister spoke repeatedly about those who are eligible. What about those who are not eligible? The Conservatives would get rid of the renewables obligation for every business, which would help every business.

That brings me to a couple of questions I have for the Minister. What we have to think about is the wider economy, so I am glad he is double-hatted and can look at businesses, too. What about pubs, restaurants, corner shops and the manufacturers that are not in the selected 10,000 given special treatment? What guarantee is there that those outside BICS will see no temporary or permanent rise in their energy bills?

The Government have accepted that carbon price support is no longer fit for purpose, and we agree. They accept that abolishing it will reduce electricity costs, and they intend to use the savings to offset the costs created by BICS. If removing carbon price support reduces electricity costs and helps finance industrial relief, why wait until April 2028? Why retain these wider carbon costs and continue to feed them into electricity prices? The question really is: why is CPS being retained through 2027-28 when BICS starts in 2027?

That leads us on to the fundamental final question, and it is interesting with the Budget coming tomorrow: how much additional Exchequer funding is required for 2027-28 specifically because carbon price support will not be abolished until April 2028? These are clearly fundamental differences between the Opposition and the Government. We favour a plan that would reduce costs for all businesses, not the lucky selected few.