Fallon hints at Budget relief for manufacturing energy costs

Business and Energy Minister Michael Fallon has given a strong hint there will be action to help manufacturers with energy costs. Speaking yesterday at the International Utility Conference, Mr Fallon […]

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By Vicky Ellis

Business and Energy Minister Michael Fallon has given a strong hint there will be action to help manufacturers with energy costs.

Speaking yesterday at the International Utility Conference, Mr Fallon admitted the risk to jobs is “very real”.

Energy intensive industries have already been given a package of measures to lessen the burden of UK and EU climate change policies.

But Mr Fallon said: “Existing compensation and exemptions are not enough. We should look at relief from other policy costs.

“The risk to jobs in the steel and chemical industries is now very real. There is a clear and present danger that we could lose jobs in these foundation industries just when we are beginning to see other jobs re-shoring to the UK.”

The minister suggested measure in the Budget may be able to help: “Without further action on energy costs the competitiveness gap between Europe and the US is becoming unbridgeable. Next week’s budget gives us the chance to underpin our commitment to manufacturing.”

Industry whispers have suggested the carbon price floor – a charge for the carbon emitted when using energy – will be tinkered with in the Budget though not scrapped.

Manufacturers’ organisation EEF certainly hopes the carbon price will be changed.

Chief Executive of the EEF, Terry Scuoler said Michael Fallon’s comments were a “welcome acknowledgement of the need to “level the playing field” for UK manufacturers in the European and global marketplace.

He said: “These sectors provide the foundation to so many parts of our economy, including the low carbon sector.

“The Chancellor has every opportunity to significantly address this issue at the Budget next week, by freezing and reducing the unilateral Carbon Price Floor and addressing the costs of the Renewables Obligation for the most energy intensive companies.”