UK Manufacturers Warn Chancellor Over Spiralling Energy Costs

  • Date: 23/02/14
  • Brian Groom, Financial Times

Vital industries will be forced to invest overseas unless George Osborne acts to check the UK’s spiralling energy costs, manufacturers have warned the chancellor.

In its Budget submission, the EEF manufacturers’ organisation says energy prices and green taxes are worrying industry more than any other issue.

It said the level of energy costs, driven up by green taxes that are higher than in other countries, threatened to damage growth and undermine efforts to rebalance the economy towards manufacturing.

The chancellor is expected to freeze the carbon price floor, a tax on fossil fuels used to generate electricity, for up to four years in response to pleas to lower energy costs for industry.

But while that will bring some relief to a range of industries, it is unlikely to be enough to satisfy the most energy-intensive sectors such as steel and chemicals.

Half the 300 companies in an EEF survey said a government commitment to keep energy costs at, or below, the EU average would be the biggest single factor encouraging them to expand manufacturing in the UK.

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