Draft Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026

Pippa Heylings Excerpts

Wednesday 4th February 2026 General Committees

[Pippa Heylings (South Cambridgeshire) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. As we have heard, British manufacturers face some of the highest industrial electricity prices in the world, so it is right that the Government recognise the pressure on sectors such as steel, chemicals and glass. I hope we will hear from the Minister that he is considering the plea from the hon. Member for Stoke-on-Trent Central for the inclusion of an exemption for ceramics.

Energy-intensive industries often operate in highly competitive international markets. They cannot simply pass on costs. As the Minister says, without support we risk carbon leakage, the loss of investment and the erosion of the UK’s foundational manufacturing base. Measures that help to keep production and jobs in Great Britain are therefore welcome.

Although the support will be a relief for large energy users, it highlights a persistent imbalance in how energy costs are treated across the wider economy. We must remember that businesses of all sizes are struggling with high and volatile energy prices, but it is small and medium-sized enterprises that feel them most acutely. Small businesses are at the heart of our economy and the heart of our local communities, yet many of them remain exposed to volatile energy costs as a result of our overdependence on volatile fossil fuel prices and the delay in electricity market reforms to stop energy bills being treated like a credit card for the whole transition.

SMEs have been afforded limited protection. When the previous energy bill relief scheme ended in 2023, Liberal Democrats estimated that over 3 million SMEs saw their energy bills rise by a combined £7.6 billion. That pressure has not gone away, so we welcomed Ofgem’s move to extend access to the energy ombudsman to smaller SMEs, but many businesses remain without meaningful routes to challenging unfair or incorrect bills, especially if they have more than 50 employees.

The energy transition is the right way forward. This morning, I visited the headquarters of the National Energy System Operator, where they literally keep the lights on. I have seen in real time the shift that has already happened in renewables and clean energy, which is critical for energy security in order to stop us being dependent on either Putin’s Russia or Trump’s America and ensure that we keep the lights on.

The scheme is funded through a levy on suppliers, as the hon. Member for Stoke-on-Trent Central mentioned, but we have some concerns. Although the Government state that households and small businesses will not see higher bills, the Government must stop the delay and bring forward the electricity market reforms so that we have assurances that higher prices will not fall on consumers. That would be giving with one hand while taking with the other. We recognise the case for supporting energy-intensive industries, but we remain concerned about the absence of comparable support for SMEs and about the potential cost to consumers.