Reeves urged not to delay energy support scheme – Daily Business

Rachel Reeves: right plan (pic: DB Media Services)

Chancellor Rachel Reeves has cut some green levies on manufacturing firms to help them meet higher energy bills arising from the Iran War.

Ms Reeves last year announced a 25% cut in electricity costs for more than 7,000 UK businesses and has now expanded this to cover a further 3,000 firms.

The British Industrial Competitiveness Scheme (BICS) exempts these businesses from certain extra charges that currently support green energy. It is expected to be worth up to £600 million per year from next April

Companies operating in the automotive, aerospace, steel, and pharmaceuticals sectors are among the those that will benefit, though there have been calls for the support to be applied immediately.

Stephen Phipson, chief executive of the manufacturers’ lobby group Make UK, said in response: “While this announcement acknowledges the problem of high UK industrial energy costs, it doesn’t provide the immediate solution to the critical cost pressures companies are facing right now.

“Manufacturers are staring down the barrel of huge increases in their energy bills this month as they renegotiate their energy contracts and, when combined with other cost increases, many simply can’t wait until 2027 for relief.

“Failure to provide help now risks substantial job losses and further deindustrialisation of a sector vital for our national security and resilience.”

Ms Reeves, who is in Washington for the International Monetary Fund (IMF) spring meetings, said: “This Government has the right plan for the economy: backing British industry, cutting electricity costs, and building a stronger, more resilient future.

“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.”

Business Secretary Peter Kyle said: “We are a government of action, and when global instability puts businesses under pressure we’ll always do what’s needed to support them and ensure Britain’s resilience.

“By extending the reach of BICS by 40%, we’re acting decisively to tackle the number one issue that businesses face head-on.”

Economy grew in February

The UK economy was on a growth path in the month before war in Iran began, according to official figures.

Gross domestic product rose by 0.1% compared to January, said the Office for National Statistics.

However,  the Iran war is expected to hit the UK economy more than others.

Britain’s economic prospects have been downgraded more than any other major economy in the International Monetary Fund’s latest update on the state of the world.

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