IoD: Deeper reform of the UK’s energy market needed

Responding to the announcement by the Chancellor of the Exchequer on the final design of the British Industrial Competitiveness Scheme (BICS), Alex Hall-Chen, Principal Policy Advisor for Energy and Sustainability, said:

“We welcome action to cut electricity costs for energy intensive manufacturers, which will help to address a longstanding competitiveness challenge for some parts of UK industry.

“However, the UK's high industrial energy costs are an issue across the economy, not just in manufacturing. Our research shows that 69% of business leaders are concerned about energy price volatility, while 39% cite energy as a major driver of costs in the year ahead, concerns heightened by the conflict in the Middle East.

“This crisis underlines the need for deeper reform of the UK's energy market, rather than tweaks at the edge. The UK must break the link between electricity and gas prices, while pursuing a pragmatic approach to domestic energy production to deliver long-term security and affordability.

“Greater clarity and action well before 2027 will be essential if businesses are to invest with confidence.”

Full survey results

591 responses from across the UK, conducted between 13-30 March 2026. 11% ran large businesses (250+ people), 22% medium (50-249), 25% small (10-49 people), 28% micro (2-9 people) and 14% sole trader and self-employed business entities (0-1 people).

How concerned are you about the following economic security risks? Please tick all that apply.

What are the biggest factors driving your outlook for costs over the year ahead? Please select up to three.