September 2022 / United Kingdom

• £49.4 million government funding to help British industry end their reliance on fossil fuels and reduce energy costs
• funding will back the development of fuel switching technology, helping to drive growth by attracting private investment and creating new jobs across the country
• part of the government’s plan to support British industry as we transition to a low-carbon economy

Nearly £50 million in government funding is being made available today (23 September 2022) to support the future of British industry.

£49.4 million will be awarded to pioneering projects across the country, helping drive economic growth through the development of fuel switching technology which will see a wide range of industries, including steel, ceramics, pharmaceuticals and food production, reduce their reliance on fossil fuels and slash energy costs.

Business and Energy Minister Lord Callanan said:

We’re investing nearly £50 million to back British industry, making sure they’re fit for the future and helping end their dependency on expensive fossil fuels.

Developing fuel switching technology will make this possible, accelerating the transition to cleaner fuels across our economy, and driving down costs for businesses.

Industrial fuel switching shifts industrial energy use from high carbon to low carbon fuels, with the aim of decarbonising industry in line with the UK’s target of reaching Net Zero by 2050 while boosting economic growth, jobs and prosperity.

Fossil fuels (including coal, gas and oil) made up around 55% of industrial energy consumption in 2019. As set out in the Industrial Decarbonisation Strategy, to decarbonise industry in line with net zero, it is expected that industrial emissions need to fall by around 2 thirds by 2035 and at least 90% by 2050.

Investing in this technology will make it easier and more cost-effective for industry to be powered by cleaner fuels like hydrogen and renewable electricity, instead of fossil fuels. The funding announced today, available through Phase 2 of the £55 million Industrial Fuel Switching competition, will support the development of new fuel switching technology in the UK, helping to attract private investment into the country and supporting new green jobs.

Supporting British industry to end their dependency on fossil fuels is a vital part of the government’s plans to boost domestic energy resilience, alongside accelerating renewables and scaling up nuclear.

Under Phase 2 of the Industrial Fuel Switching competition, fuel switching projects can apply for a share of £49.4 million government funding. This follows Phase 1 of the competition, which saw £5.6 million awarded in May 2022 to 21 projects for early-stage feasibility studies into their project designs.

Previous winners under Phase 1 included:

• projects helping the ceramics, food production and steel sectors become powered by hydrogen instead of natural gas
• technology to develop heat pumps for food and pharmaceutical businesses
• studies exploring switching glass making facilities from natural gas to gasified waste and biomass

• more businesses to be categorised as small businesses, meaning less red tape
• move will potentially exempt tens of thousands of the UK’s growing businesses from relevant future regulations, saving them thousands of pounds
• start of a sweeping package of reforms to cut red tape for business and stimulate growth

Thousands of the UK’s fastest-growing businesses will be released from reporting requirements and other regulations in the future, as part of plans aimed at boosting productivity and supercharging growth, Prime Minister Liz Truss announced earlier today (Sunday 2 October).

Currently, small businesses are presumed to be exempt from certain regulations. However, many medium sized businesses – those with between 50 and 249 employees - still report that they are spending over 22 staff days per month on average dealing with regulation, and over half of all businesses consider regulation to be a burden to their operation [source].

The Prime Minister has announced plans to widen these exemptions to businesses with fewer than 500 employees for future and reviewed regulations, meaning an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that is expensive and burdensome for all but the largest firms.

The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses.

Regulatory exemptions are often granted for SMEs, which the EU defines at below 250 employees. However, we are free to take our own approach and exempt more businesses to those with under 500 employees. We will also be able to apply this to retained EU law currently under review, which we would not have been able to do without our exit from the EU.

The changed threshold will apply from tomorrow (Monday 3 October) to all new regulations under development as well as those under current and future review, including retained EU laws. The government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1,000 employees, once the impact on the current extension is known.

This is the first step in a package of reforms to ensure UK business regulation works for the UK economy. The reforms will harness the freedoms the UK has since leaving the EU to remove bureaucratic and burdensome regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money.

Press release

• Start Up Loans of up to £25,000 now available to start-ups that have been trading for up to 3 years, up from 2 years
• new ‘second loans’ available for businesses that have been trading for up to 5 years
• loans to provide much-needed support for the UK’s innovators and entrepreneurs

An £884 million loan scheme for new businesses is to be greatly expanded, delivering much needed finance to the UK’s array of innovative start-ups, the Business Secretary Jacob Rees-Mogg has announced today (Sunday 25 September).

The Start Up Loans programme has provided more than 95,000 loans to start-ups across the UK since its inception in June 2012, offering an average of just over £9,000 in support.

With 33,000 new loans available, the programme’s eligibility will be expanded to support businesses trading for up to 3 years, up from 2 years. Businesses can apply immediately under the new criteria.

Start Up Loans provide a fixed interest rate of 6%, as well as mentoring, support and funding to aspiring business owners across the UK, providing support to those who might find it difficult to secure loans from traditional lenders.

Alongside this, a new second loan will be available to businesses operating for up to 5 years, providing eligible businesses between 3 and 5 years old a much-needed government-backed finance to support their expansion at a crucial juncture.

Business Secretary Jacob Rees-Mogg said:

This government is relentlessly focused on driving growth to create better jobs, boost wages and fund our vital public services like the NHS. Encouraging entrepreneurship and new businesses to thrive is critical to growing the economy and raising living standards.

From a hair salon in Wales, to a furniture business in Northern Ireland and a cake seller in the Lake District, expanding the Start Up Loans Scheme will support these small businesses through this challenging period and position them to grow - creating jobs and opportunities across the UK.

The scheme has backed businesses across the United Kingdom, with more than £54 million provided to businesses in Scotland, £42 million in Wales and over £12 million in Northern Ireland.

Expansion of the Start Up Loans scheme follows the 2021/22 Spending Review, at which the government made the commitment to provide 33,000 loans to the programme over the next 3 years.

The extension provides further government support for businesses grappling with cost pressures and adds to measures announced by the Chancellor earlier this week, including the introduction of the Energy Bills Relief Scheme to help support them with the costs of energy, reforming off payroll working rules and simplification of the alcohol duty system.

It also builds on key measures the government has announced for small businesses in particular, including extending the £4.5 billion Recovery Loan Scheme and delivering the Help to Grow schemes, which provide mentoring and free software to thousands of businesses across the UK.

Michelle Ovens CBE, founder, Small Business Britain said:

The expansion of funding opportunities for start-ups and growing businesses will certainly be welcomed by small firms as a positive move to unleash their potential. Access to finance is vital for entrepreneurs to grow, and with rising costs and challenges across the board they need all the help they can get right now to realise their ambitions.

British Business Bank, Managing Director of Start Up Loans, Richard Bearman, said:

We are delighted to be able to extend the reach of the Start Up Loans programme to help support businesses who need extra support during a time of continued economic unrest.

This extension of the programme will enable us to work with those businesses that had perhaps just got going when the pandemic hit, or are ready to scale up now that they are back on their feet. We want to ensure that these businesses do not get left behind.