British businesses to save over £400m a year as government slashes electricity costs

• Government slashes electricity costs to save British businesses over £400m a year from April 2026 through landmark support under the UK's modern Industrial Strategy.
• UK industry including steel, chemicals, cement, glass and paper employing around 400,000 people to benefit from 90% discount on their electricity network charges.
• Unprecedented support brings UK industrial energy costs in line with European competitors to protect jobs and attract new investment, helping drive growth and deliver Plan for Change.

Around 500 of the UK's most energy-intensive businesses are set to save up to £420 million per year on their electricity bills from next April, as the Government takes decisive action to slash industrial energy costs.

Business Secretary Peter Kyle has today (31 October) announced that government will power ahead with plans to increase the discount on electricity network charges for businesses in sectors like steel, cement, glass, and chemicals, which employ around 400,000 people in total across the UK, from 60 percent to 90 percent.

Some of these businesses currently pay the highest industrial electricity prices in the G7, making it harder to stay competitive on the international stage, which is why the Government has taken decisive action to deliver this relief and level the playing field for industry.

The landmark support, which is being delivered at no extra cost to taxpayers, fulfils a crucial promise in the UK's modern Industrial Strategy launched in June, and follows a four-week consultation on the plans for the increased discount which ran between July and August this year.

The increased discount will also slash costs for a range of businesses across Scotland and Wales to help them support local jobs and deliver growth, including Tata Steel at Port Talbot and INEOS in Grangemouth, ensuring the benefits are felt right across the country.

It comes on top of the Government's landmark British Industrial Competitiveness Scheme announced in the modern Industrial Strategy, which will slash energy costs by 25 percent for over 7,000 businesses from 2027 in sectors like aerospace, automotive and chemicals, supporting hundreds of thousands of skilled jobs in these industries.

The Supercharger and British Industrial Competitiveness Scheme will be funded through reforms to the energy system. The Government is reducing costs within the system to free up funding without raising household bills or taxes.

Business and Trade Secretary Peter Kyle said:

“British industry deserves a level playing field – and this government is delivering it. We've heard businesses loud and clear, and this landmark support will help them stay competitive on the global stage so they can invest and grow here in the UK.

“This is our Modern Industrial Strategy in action: practical, targeted support that secures jobs, attracts investment and drives our economy forward, as part of our Plan for Change.”

Encirc Glass Managing Director Sean Murphy said:

“This will be a major boost for our industry and will help British glass manufacturers compete with cheaper imports from regions that do not bear the same level of cost and regulation. By cutting the costs of energy in this way, the government is helping our industry to support thousands of jobs across the country whilst we make the transition to renewable sources of power. 

“We welcomed the opportunity to engage with the Minister on the pressing challenges facing our sector. Continued government support for vital industries like glass manufacturing is essential to safeguarding jobs and unlocking investment across all regions of the UK.”

Ben Martin, Policy Manager at the British Chambers of Commerce said: 

“Our research shows energy costs remain a major concern, forcing many businesses who are struggling to pay their bills to raise prices.  

“Energy is a business essential not a luxury. The promise of cheaper bills for hundreds of energy-intensive firms through increasing the discount on electricity network charges is welcome.”

Community Union Assistant General Secretary Alasdair McDiarmid said:

“We welcome the government's determination to reduce the industrial energy costs which are such a huge burden on energy-intensive industries like steel.

“Whilst there is still more to do, the decision to increase the level of compensation for network charging costs from 60% to 90% is a huge step in the right direction. This will help avert carbon leakage, and will go some way towards boosting the competitiveness of our steel producers in line with European counterparts. 

“After long years of neglect, our members in the steel sector know that they now have a government which is on their side.”

The increased discount under the Network Charging Compensation (NCC) Scheme will bring down electricity bills for businesses by slashing the prices they pay to access the UK's electricity network.

This will help bring industrial energy prices in line with other major European economies to keep the UK competitive on the global stage, protect local jobs in the UK's foundational industries, and attract new investment, delivering on the Government's Plan for Change.

The Government is also driving forward plans to have a new Connections Accelerator Service in force by the end of 2025, which will streamline access to the UK's electricity grid.

This will make it easier for major investment projects to speed up delivery, bringing new high-quality jobs and growth to local communities and boosting the UK's investment attractiveness further.