EU policies could account for just under 16 per cent of the cost of power for energy intensive industries by 2030

Call to reform 'poorly designed' EU energy policy

EU energy policy has played an increasing role in "reducing Britain's industrial output and in destroying jobs", a business campaign group has warned.

EU energy regulations have cost the UK economy between £86.6bn and £93.2bn net so far, according to Business for Britain's research of Government Impact Assessments contained in its paper on EU energy policy.

The report, entitled 'Energy policy and the EU – How a better deal could bring down the cost of energy and save jobs', analysed the impact of recent EU energy laws and concluded the EU should devise one target for reducing emissions with member states free to determine their own policies to meet this target.

The report's co-author, Matthew Elliott, chief executive of Business for Britain, said: "The EU's energy regulations aren't working and we are already paying the price for their failure. Poorly designed policy and unrealistic targets have conspired to help push up energy bills and put jobs at risk, but failed to open up the market to cross-border trade.

"Renegotiation offers a once in a generation opportunity to get a better deal for British businesses and fix the EU's broken energy policy. It's time for the Commission to make good on its commitment to subsidiarity and allow member states to decide themselves how they meet EU emissions targets."

According to the report, rising energy costs threaten up to 1.5 million jobs in the energy intensive sector, with 363,000 of these jobs being at high risk. EU policies currently account for up to 9 per cent of the cost of energy for these industries, the report says, but this could increase to just under 16 per cent by 2030.

It found energy prices across the EU were among the highest in the developed world, with medium-sized industrial consumers in the EU paying around 20 per cent more for electricity than companies in China, approximately 65 per cent more than companies in India and more than twice as much as companies based in the US and Russia.

The paper also argued Europe's high energy prices "undermine efforts" to combat climate change, warning Europe could become increasingly dependent on imports from other countries, which do not comply with the same high environmental standards as European firms.

In its conclusion the paper states: "This paper does not attempt to claim that the EU is the only reason that energy prices have increased over the last decade, however it is clear that the EU has played a significant and growing role in driving up the cost of energy.

"Restoring the power to block, amend or leave poorly designed EU laws to member states will help address these problems. Such changes will help ensure that future EU energy policies take the needs of British industry into greater consideration.

"In short, renegotiation offers an opportunity for the British government to create savings, reduce the cost of energy and halt the exodus of manufacturing. It is an opportunity that should be grasped."

The paper added that in 2012-13 alone the National Health Service spent approximately £630m on energy.

It compared energy bills between continents and found between 2005 and 2012 the gas price index for the EU increased by 35 per cent and the electricity price index by 38 per cent, while in contrast the US gas price fell by 66 per cent and the electricity price by 4 per cent due in part to shale gas.

Responding to the paper, a Department of Energy and Climate Change spokeswoman said: "The UK's energy policies are designed to keep the lights on, cut energy use and reduce polluting emissions, at the lowest possible cost to gas and electricity customers.

"Our move to a low-carbon future is bringing thousands of jobs and investment to every corner of the country. Since 2010, £45bn has been invested, and by 2020 we expect to see 250,000 jobs supported by the low-carbon sector."

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