The UK's manufacturing competitiveness is set to get a £600 million boost, courtesy of the British Industrial Competitiveness Scheme (BICS), which is now under review by the Subsidy Advice Unit (SAU). This high-stakes evaluation will determine whether the government's ambitious plan to bolster the sector's global competitiveness aligns with subsidy control requirements. The proposed scheme aims to drive growth and investment across Great Britain, with a focus on 'frontier industries' and sectors providing critical inputs, as outlined in the UK government's Modern Industrial Strategy.
The BICS targets businesses operating in high-growth sectors that are vulnerable to electricity policy cost distortions, which it estimates could be reduced by up to 100% through exemptions from levies associated with the Renewables Obligation, Feed-In Tariffs, and the Capacity Market. This would deliver savings of approximately £40 per MWh for eligible businesses, potentially unlocking additional investment. The scheme's proposed budget is estimated at around £600 million per annum, with an initial year of support equivalent to an extra year of subsidies.
The UK government's proposals intend to stimulate investment and drive long-term growth in the manufacturing sector, which has faced significant challenges in recent years. Businesses will need to demonstrate their eligibility for support by operating within specified sectors and manufacturing eligible products, with full lists provided in the government's consultation response. The value of support will also be linked to the proportion of electricity consumption dedicated to eligible activities.
The SAU has commenced its evaluation and is expected to deliver a report within 30 working days, providing an assessment of the DBT's compliance with subsidy control regulations. Interested third parties are invited to submit comments, which must provide express consent for their full and unredacted submissions to be shared with the DBT.
Shadow Secretary of State for Business and Trade has welcomed any support for British manufacturing but called for greater clarity on how the scheme would deliver long-term growth and ensure fair competition. The review's outcome will be critical in determining whether the BICS aligns with broader industrial strategy goals and ultimately drives sustainable growth in the sector.