Make UK has called on the Business Secretary to review eligibility for the British Industrial Competitiveness Scheme (BICS) now, warning that some energy-intensive manufacturers could otherwise be left without support until a proposed review in 2030.

In a letter seen by Business Matters, Make UK chief executive Stephen Phipson told Jonathan Reynolds, Secretary of State for Business, Innovation, Science and Trade, that the current criteria risk excluding internationally competitive businesses because of their sector or product classifications.

The letter, dated yesterday, follows a conversation between the two after the Budget. Phipson wrote that the Budget “failed to address the underlying industrial energy costs holding back investment and growth in manufacturing”, although Make UK welcomed its clarification of how BICS will be funded.

How the scheme decides eligibility

From 2027, BICS will reduce electricity costs by up to £40 per megawatt hour for eligible manufacturers by exempting them from the indirect costs of the renewables obligation, capacity market and feed-in tariff, according to the Department for Business, Innovation, Science and Trade.

To qualify, a business must operate in an eligible sector defined by Standard Industrial Classification (SIC) codes, make an eligible product defined by Harmonised System (HS) codes and meet a minimum level of electricity use, the department says. Applications opened on 1 October and close on 30 November.

In the letter, Make UK says manufacturing supports 2.6 million jobs and accounts for 42 per cent of UK exports. Phipson wrote that the organisation recognised “the need for clear, objective eligibility criteria”, but that waiting until 2030 risks leaving some manufacturers without support for too long.

The Advance Tapes case

The letter cites Advance Tapes Group, a manufacturer based in Thurmaston that employs 102 people and exports more than 75 per cent of its UK production, competing directly with manufacturers in Europe and elsewhere.

According to Make UK, Advance cut its electricity consumption by 22 per cent between 2021 and 2025, yet its electricity bill rose by 52 per cent over the same period, from about £342,000 to £518,000. Its average effective electricity cost rose from about 12p to 23p per kWh.

The letter puts Advance’s indicative company-level electricity intensity at about 12.7 per cent of gross value added, based on its 2025 electricity spending, operating profit and employment costs. The Government uses a sector-level threshold of 2.7 per cent to identify foundational industries for BICS.

Make UK acknowledges in the letter that the two are different measures and that the comparison “does not establish eligibility”. It says the figures nevertheless illustrate the risk of overlooking an individual manufacturer’s electricity costs when its sector is assessed as a whole.

Advance appears largely to fall outside the scheme, according to the letter, because most of the pressure-sensitive adhesive tapes it produces are not covered by the selected SIC and product classifications.

What Make UK is asking for

Make UK wants an alternative route allowing individual manufacturers to demonstrate eligibility based on their actual electricity intensity and exposure to international competition, rather than relying only on sector-level averages and product classifications. Failing that, Phipson wrote, the Government should at least remove “the additional burden of HS codes for product identification”.

The organisation also repeated its call for policy levies to be removed from industrial electricity bills. Phipson wrote that the Government’s cost control framework “may start to tackle this problem, but manufacturers cannot afford to wait until 2027 for action.”

Make UK research shows 13 per cent of manufacturers believe another energy price shock could prove terminal for their business. Business Matters reported in June that a quarter of manufacturers had moved production overseas or were considering it, citing energy costs, and in January that Make UK warned rising costs were pushing the sector towards an investment tipping point.

Phipson said: “The Budget was the first real test of the Government’s pledge to reindustrialise Britain. We remain disappointed that it failed to address the underlying industrial energy costs holding back investment and growth in manufacturing.”

He added: “Without urgent action reindustrialisation will remain a political slogan rather than an economic reality.”

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