{"id":395863,"date":"2026-04-16T21:19:08","date_gmt":"2026-04-16T21:19:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/395863\/"},"modified":"2026-04-16T21:19:08","modified_gmt":"2026-04-16T21:19:08","slug":"it-will-take-more-than-600m-a-year-to-boost-uk-industrial-competitiveness-nils-pratley","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/395863\/","title":{"rendered":"It will take more than \u00a3600m a year to boost UK industrial competitiveness | Nils Pratley"},"content":{"rendered":"

It is \u201cbold action\u201d to boost UK competitiveness, claimed the government. Not everybody shared that assessment of the British industrial competitiveness scheme (Bics)<\/a>, the long-awaited plan to cut electricity bills for UK manufacturers by up to 25% \u2013 or, at least, to cut them for a subset of firms that are aligned with the eight chosen sectors of the \u201cmodern\u201d industrial strategy.<\/p>\n

\u201cGas intensive industries in the UK have been shamefully ignored by the government in this announcement \u2013 it\u2019s a total disgrace,\u201d said Gary Smith, the general secretary of the GMB union, banging the drum for the likes of ceramics-makers and brickmakers that aren\u2019t deemed modern enough for support. Employer bodies mostly did the polite thing of welcoming government assistance of any form before using phrases such as \u201cdrop in the ocean\u201d.<\/p>\n

And, it\u2019s true, \u00a3600m a year across 10,000 companies isn\u2019t much. In the government\u2019s defence, one could say Bics has been expanded from the 7,000 firms advertised at the initial announcement last summer. In addition, a back-dated feature has been introduced: the scheme will still start in April next year, but qualifying firms will then be able to claim what they would have got.<\/p>\n

Complicated? You bet. And the complications are only magnified in the operational detail. You don\u2019t just have to be in a \u201cfrontier\u201d or a \u201cfoundational\u201d industry that serves the frontier-pushers; a further qualifying criterion will be applied to electrical intensity across product lines. So this scheme isn\u2019t just targeting sectors in the industrial strategy \u2013 it is targeting products within those sectors. If you jump through all the hoops, then you get relief from three policy costs on bills, including two green levies, worth up to \u00a340 per megawatt hour.<\/p>\n

There are two big-picture points here. First, the scheme came with the clearest acknowledgement to date by the government that the UK\u2019s sky-high cost of energy for business \u2013 the highest in the developed world \u2013 is damaging competitiveness and growth. For the targeted areas, there is now an ambition to get electricity prices in line with European averages.<\/p>\n

Second, the government can see that the thicket of policy costs and levies on bills lies at the heart of the problem. Thus the carbon price support mechanism, a charge on generators that is passed on to bill payers, is being abolished, having served its purpose of driving coal off the grid (though why it takes until April 2028 to actually kill it is a mystery).<\/p>\n

But then one comes back to that modest nature of the \u00a3600m. This is really a debate about how to distribute the costs of energy transition and new grid infrastructure. Many other European countries including Germany take a greater chunk of policy costs into general taxation in the name of keeping industry alive and competitive. In the UK, the habit has been to shove it all on to bills. Now the principle has been conceded that, in some areas of industrial activity, there needs to be some form of rebalancing.<\/p>\n

In an imaginary world without fiscal constraints, one can imagine a bigger scheme with less laser-like targeting. It would also run to several billions of pounds, which is presumably why Rachel Reeves won\u2019t go there. Treasury officials, it is said, remain unconvinced that a wider scheme would pay for itself over time in terms of higher growth and tax receipts.<\/p>\n

Thus Bics can only be viewed as an unsatisfactory fiddle. It acknowledges that nose-bleed electricity prices are a structural problem, but tries to pretend they\u2019re only an issue for a narrow section of industry. There is a risk the government thinks it\u2019s cracked the competitiveness challenge. Sadly, it\u2019s more than a \u00a3600m-a-year fix.<\/p>\n","protected":false},"excerpt":{"rendered":"It is \u201cbold action\u201d to boost UK competitiveness, claimed the government. Not everybody shared that assessment of the…\n","protected":false},"author":2,"featured_media":395864,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":{"0":"post-395863","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-il","11":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/395863","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=395863"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/395863\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/395864"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=395863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=395863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=395863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}