A new initiative to cut electricity bills for thousands of businesses by up to 25% is at the heart of a 10-year plan announced by the British Government to boost investment in industry.
The Department for Business and Trade says that from 2027 the British Industrial Competitiveness Scheme will reduce costs for more than 7,000 electricity-intensive businesses in manufacturing sectors such as automotive, aerospace and chemicals.
Hundreds of Scottish businesses could be in line to benefit.
These firms, which support more than 300,000 skilled jobs, will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market — helping level the playing field and make them more internationally competitive.
The scheme is a key feature of the Industrial Strategy which tackles two of the biggest barriers facing UK industry – high electricity prices and long waits for grid connections.
British manufacturers currently pay some of the highest electricity prices in the developed world while businesses looking to expand or modernise have faced delays when it comes to connecting to the grid.
The government is also increasing support for the most energy-intensive firms — such as steel, chemicals, and glass — by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger.
These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%. This means their electricity bills will go down, helping them stay competitive, protect jobs, and invest in the future.
This will help around 500 eligible businesses in sectors such as steel, ceramics and glass reduce their costs and protect jobs at no additional cost to the taxpayer. The support for steel manufacturing is seen as crucial as it is a critical enabling industry for Scotland’s defence and renewable energy sectors.
Ministers say these reforms complement the government’s long-term mission for clean power as the route to bringing down bills by ending the UK’s dependency on volatile fossil fuel markets.
To help businesses grow and hire without delay, the government will also deliver a new Connections Accelerator Service to streamline grid access for major investment projects — including prioritising those that create high-quality jobs and deliver significant economic benefits.
The UK government said it will work closely with the energy sector, local authorities, Scottish and Welsh Governments, trade unions, and industry to design this service, which it expects to begin operating at the end of this year.
New powers in the Planning and Infrastructure Bill, currently before parliament, could also allow the Government to reserve grid capacity for strategically important projects, cutting waiting times and unlocking growth in key sectors.
Prime Minister Sir Keir Starmer said: “This Industrial Strategy marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past.
“In an era of global economic instability, it delivers the long term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people’s pockets as part of the Plan for Change.
“This is how we power Britain’s future – by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear – Britain is back and open for business.”
Scottish Secretary Ian Murray will today visit a new industrial development in East Lothian, on the site of a former coal-fired power station, partly funded by an £11 million UK Government investment. It includes the construction of an interconnecter to take power from the Inchcape offshore wind farm to the National Grid.
Joint Department for Business and Trade / HM Treasury Minister for Investment, Baroness Poppy Gustafsson, will meet senior figures from Dundee’s life sciences and tech, gaming, and creative sectors.
Business and Trade Secretary Jonathan Reynolds said: “We’ve said from day one Britain is back in business under this government, and the £100 billion of investment we’ve secured in the past year shows our Plan for Change is already delivering for working people.”
Energy Secretary Ed Miliband said: “For too long high electricity costs have held back British businesses, as a result of our reliance on gas sold on volatile international markets.
“As part of our modern industrial strategy we’re unlocking the potential of British industry by slashing industrial electricity prices in key sectors.
“We’re also doubling down on our clean power strengths with increased investment in growth industries from offshore wind to nuclear. This will deliver on our clean power mission and Plan for Change to bring down bills for households and businesses for good.”
Rain Newton-Smith, chief executive of the CBI said: “Today’s Industrial Strategy announcement is a significant leap forward in the partnership between government and business that sets us on the path to our shared goal of raising living standards across the country.
“It sends an unambiguous, positive signal about the nation’s global calling card as well as the direction of travel for the wider economy for the next decade and beyond.”
Tufan Erginbilgic, CEO at Rolls-Royce CEO, said: “The UK Government’s Industrial Strategy commitment to support our world-leading aerospace and nuclear industries shows long-term strategic foresight.
‘Rolls-Royce’s highly differentiated technologies in gas turbines and nuclear capabilities- including SMRs and AMRs- are uniquely placed to deliver economic growth, skilled jobs and attract investment into the UK.”
Murray faces MPs
The Commons Scottish Affairs Committee will question Scottish Secretary Ian Murray on 25 June.
This evidence session forms part of the committee’s regular scrutiny of the Scotland Office and will be an opportunity for MPs to ask about areas of interest to the committee.
The cross-party committee is likely to ask about the Scotland Office’s spending review settlement, including the spending review’s funding for Scotland’s defence sector, support for Scottish trade and investment in Project Acorn.
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