The EEF wants energy intensive industries like steel and chemicals to be shielded from energy policy costs

Industrial energy costs hurting growth

Rising industrial energy prices are presenting a threat to jobs and economic growth, says EEF, the manufacturers' organisation.

The government is being urged to mount an "all-out attack" on costs or face the prospect of firms being forced to invest overseas, in the trade bodies’ submission ahead of next month's Budget.

The EEF said the cost of energy was the issue firms were most negative about in a survey of 300 companies which also showed that half believed tackling energy costs was the biggest factor affecting expansion plans.

The EEF said energy intensive industries such as steel and chemicals should be shielded from "excessive" energy policy costs.

Chief executive Terry Scuoler 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.

"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.

"EEF is also calling on the Chancellor to address other areas in support of UK manufacturing, including measures on skills, funding for business support services and improving access to funding, especially for smaller companies."

To help reduce the impact of green levies on business, EEF is calling on the government to freeze and then reduce the cost of the Carbon Price Floor, which was introduced last year as a tax on greenhouse gas pollution to encourage investment in low-carbon generation.

The EEF estimates that the tax on its own will account for almost 10 per cent of a large industrial user’s electricity bill by the general election next year, but industrial rivals in Europe are already paying significantly less carbon tax compared to the UK.

The organisation also want the government to shield vital energy-intensive industries such as steel and chemicals from excessive UK energy policy costs by addressing the costs of the Renewables Obligation and Small Scale Feed-in Tariffs, which add an additional 15 per cent to the bill of a steel company operating in a globally competitive market.

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