Manufacturers raise heat on energy costs

Andy T�scher: EEF chief
Andy T�scher: EEF chief
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YORKSHIRE manufacturers’ leader Andy Tüscher is calling on the Government to “get a grip” on the spiralling costs of its climate change policies.

Mr Tüscher was speaking after the Department of Energy and Climate Change published its latest assessment of the impact of UK government climate change policies on energy prices.

His call comes as a small business leader warned energy costs were already a “make or break” issue for small firms who could not bear further increases.

Describing the DECC report as “a wake up call,” Andy Tüscher said: “Policies are already adding 30 per cent to business electricity prices. This will rise to 50 per cent by 2020 and 70 per cent by 2030.”

He added budget measures to shield energy intensive industries from a portion of the costs will make a difference.

“But,” he added, “unless we get a grip on spiralling policy costs, steeply rising electricity prices for the rest of the sector risk making the UK an increasingly unattractive location for industrial investment and undermining efforts to rebalance the economy.

“The first step is scrapping costly policies with questionable environmental impact, such as the carbon price floor and the CRC Energy Efficiency Scheme, as soon as public finances allow.”

Gordon Millward, regional chairman of the Federation of Small Businesses and the owner of a Sheffield manufacturing business, said: “The Department for Energy and Climate Change report makes grim reading for the UK’s small businesses.

“The cost of energy is already becoming a make or break issue for small firms and they simply cannot shoulder a 22 per cent increase in prices as the report predicts. The truth is that current Government policies are failing to protect small firms from the rising costs of energy and this is hitting not only UK-plc but small and micro businesses – on which we depend for growth.

“With both the Green Deal and the smart meter rollout unlikely to deliver any real benefits for the UK’s smallest firms what we really need is a radical shake up of the retail energy market to create real competition in order to help cap future price rises.”

Research by the FSB has shown that four out of every five small firms are worried about the rising cost of energy.