21.01.2026

Make UK has recently responded to the Government’s consultation on the BICS. We believe that the BICS – which aims to reduce energy costs for industry by 25% – could transform the UK’s industrial landscape. Manufacturers are seeing other countries acting faster and more decisively and without action, the UK will continue to face higher energy costs, weaker investment, and the managed decline of key industries. 

Our response highlighted our support of the Government’s aim to reduce energy bills for manufacturers understanding it as one of the key blockers to the sector’s growth.

Energy costs as a barrier to manufacturing growth

We see the BICS to be a key facet in helping the sector to deliver economic growth. For the scheme to be effective, we have insisted that Government consider expanding eligibility to include all manufacturing businesses and to backdate the scheme to April 2026 to protect manufacturers impacted by expected bill rises.

Supporting regional growth and industrial heartlands

To deliver growth, support must focus on the sectors that create jobs and drive regional prosperity. Manufacturing underpins productivity in the very parts of the country where economic renewal is most needed. Targeted support for energy bills would strengthen these regional industrial heartlands, creating long-term, high-quality employment, and rapid regional growth.

In a fiscally constrained economy, the cost of inaction is far greater than the cost of delivery. Industrial decline brings lost tax revenues, higher unemployment costs, and ultimately expensive emergency interventions to save strategically important firms.

Funding the BICS fairly and effectively

The response raised concerns about the lack of mechanism to fund the BICS. The most efficient and fair way to fund the policy is by general taxation however within a constrained fiscal environment this may be difficult. Alternatively, funding the BICS by a levy on others’ electricity or gas bills must be ruled out as this would unfairly raise energy bills for households and businesses.

We have encouraged Government to explore the use of finance from other carbon pricing mechanisms, such as the EU ETS, and provide a comprehensive vision for ‘bearing down on system costs’.

The limitations of SIC codes and supply chain impacts

Finally, we have highlighted the flaws with using a crude tool such as SIC codes as a way of defining eligibility. SIC codes as a qualifying measure will probably exclude many small but critical suppliers.

For example, we have companies machining fan blades for military and commercial aerospace engines. They require a specialist electro-deposited coating process. The small number of companies providing this critical process have ceased trading or offering this service due to energy costs so the blade machinists now must send the blades for coating to the USA. 

Now the engine makers are looking at machining the blades closer to the coating process (in the USA) so the UK will lose not only the specialist coating technology but also the machining which is a critical part of UK supply chain.

High energy costs have a cumulative effect on the supply chain. SIC codes may not have included these core technologies which are SME based. This pattern is seen through key R&D activities particularly in Pharma where SIC codes are not detailed enough to pick up these vital energy dependent activities. 

We have encouraged Government to review SIC codes to make them more granular, or we move to a different measure such as energy intensity.

Continuing to work with Government

We will continue to work with Government to ensure that the BICS is implemented as effectively as possible reaching the maximum number of parties and ensuring they can continue to compete in a challenging business environment.