Rachel Reeves announced the action to support firms after warning over the lingering impact of the Iran war.
The Government has expanded plans to cut electricity bills for thousands of UK manufacturing firms as the conflict in the Middle East pushes energy costs higher.
Chancellor Rachel Reeves announced the action to support firms after warning over the lingering impact of the Iran war on inflation and economic growth.
Ms Reeves, who is in Washington for the International Monetary Fund (IMF) spring meetings, said the plan will help UK businesses compete and create jobs despite the uncertain economic backdrop.
Last summer, the Government announced a plan to cut electricity bills by up to 25% for more than 7,000 UK businesses, as part of a 10-year industrial strategy.
On Wednesday, it revealed plans to expand this to cover 10,000 firms.
The British Industrial Competitiveness Scheme (BICS) will cut costs by up to £40 per megawatt-hour from 2027 by exempting businesses from certain extra charges that currently support green energy and back-up power supply systems.
It said it plans to roll out an additional one-off payment in 2027 to an extra 3,000 businesses, including companies in the automotive and aerospace, steel, and pharmaceuticals sectors.
The Government said it will also cover the support firms would have received if the BICS had been in place from this month.
The BICS scheme is expected to be worth up to £600 million per year from next April.
Ms Reeves said: “This Government has the right plan for the economy: backing British industry, cutting electricity costs, and building a stronger, more resilient future.
“Today’s announcement will cut energy bills for over 10,000 manufacturers, helping businesses to compete, win and create good jobs across the country, and to deliver our modern industrial strategy.”
Business Secretary Peter Kyle said: “We are a government of action, and when global instability puts businesses under pressure we’ll always do what’s needed to support them and ensure Britain’s resilience.
“By extending the reach of BICS by 40%, we’re acting decisively to tackle the number one issue that businesses face head-on.”
