UK energy costs “most off-putting for manufacturers”

Hefty energy prices are the issue manufacturers are most negative about according to a new survey. The poll of nearly 300 major industrial energy users found that for half, government […]

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By Vicky Ellis

Hefty energy prices are the issue manufacturers are most negative about according to a new survey.

The poll of nearly 300 major industrial energy users found that for half, government commitment to keep energy costs at, or below, the EU average would be the biggest single factor in encouraging more companies to expand their manufacturing activity in the UK.

Industry body EEF which carried out the survey said it reveals power costs are a concern for businesses which typically spend millions of pounds on electricity or heat a year.

When asked to rate what was a strong advantage or disadvantage, energy prices appear to have been firmly rated as the latter.

Terry Scuoler, EEF Chief Executive said: “Rising energy costs represent a major threat to growth and could damage efforts to support and sustain long term recovery. The UK cannot afford to pile even more unilateral costs on the manufacturing sector which is key to developing the UK’s longer term growth and stability.”

He added: “Many manufacturers now feel that they are being severely penalised by high energy costs, some of which are being unilaterally imposed and are not shared by competitor nations.”

Ahead of the Treasury’s 2015 Budget which the Chancellor will announce on 19 March, the group is calling for a freeze and then a cut of the carbon price floor – a British tax on fossil fuels generating electricity.

There are strong rumours the carbon price floor will be featured in the next Budget but it is not expected to be scrapped. The EEF is one of several groups hoping to sway Treasury officials over the next month.

Parliamentary notes show that from 1 April 2014, the carbon price support rate (which is imposed via the Climate Change Levy) and fuel duty will be equate to £9.55 per tonne.