Help for business energy bills won’t go as far after Iran strikes

A landmark scheme to cut £600 million from electricity bills for 10,000 businesses will be far less generous than intended due to rising energy prices, the government has been warned. The British Industrial Competitiveness Scheme (Bics) aims to cut electricity bills by up to 25 per cent by giving relief from green levies for businesses which meet criteria for the amount of the energy they use and the types of products they manufacture. The government expects the scheme to cost £600 million a year until it ends in 2035. Most commented 1 Charles ‘hissed’ at me over Diana’s death, says Earl Spencer Royal family 1,182 comments 2 Air traffic control chaos: grounded flights caused by software defect Transport 225 comments Brokers said the government would be deluged with applications when the portal for applications opens on October 1, with businesses able to apply until November 30 ahead of the scheme’s launch in April. Business newsletter The business editor’s exclusive analysis of all the latest financial and economic news. Sign up with one click You’ve successfully signed up to the Business newsletter Explore our newsletters An error occurred. Please use the link below. Business newsletter Explore our newsletters But, business groups are warning that the scheme will be less valuable to companies than when it was announced as part of the government’s industrial strategy in 2025, because wholesale energy prices have rocketed since the outbreak of the Iran war. Top stories 1 Miley Cyrus: Bass Persuades review — can she convince Gen Z to dance again? Music 2 Inside labs combating man-made viruses that could cause the next pandemic Science 3 The ten best winter sun and festive Times Holidays to book now Promoted content Paul Wilson, policy director at the Federation of Small Businesses, said: “As a proportion of bills, Bics will be less than would be anticipated prior to the Middle East crisis . We’ve seen wholesale prices basically double since the end of February [when the war began]”. Advertisement Patrick Matthewson, senior policy manager at lobby group MakeUK, said that while the scheme was “well intended” it did not go far enough. “It was proposed as part of the industrial strategy and in a different set of circumstances: we didn’t have the Iran war, we didn’t have this massive increase in energy costs coming”. Top stories 1 The ten best winter sun and festive Times Holidays to book now Promoted content October is a key month with many business’s electricity contracts coming up for renewal. Liam Conway, managing director of broker Greenfields Energy, said that prices had moved dramatically in recent months. He gave the example of a client whose current electricity contract cost £136,000 a month and was due for renewal. The customer faced a rise to £188,615 at prices quoted in June, but that quote has now risen to £211,349. Pursuit of net zero has failed to cut British energy bills Conway has been contacted by 300 companies preparing applications for Bics and said that even if the scheme was less generous than intended it was “still a phenomenal benefit”. Allan Isherwood, business development director at energy and sustainability adviser Eyebright Utilities, said he had seen strong interest from businesses looking for information about Bics. “It could provide valuable support for qualifying businesses at a time when energy costs remain a significant concern,” he said. Advertisement A government spokesperson said: “The scheme will reduce electricity bills by up to 25 per cent for over 10,000 manufacturing businesses, and we will review the scheme in 2030 to assess how well it is operating and improving competitiveness for businesses.”