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Some of the UK’s key manufacturing sectors are being put at a significant competitive disadvantage because energy and climate change policy is making electricity more expensive, according to a report commissioned by the government. Amongst a range of findings, the report demonstrates that steelmakers in major competing countries such as Germany, Russia, India, the USA and China can expect to pay considerably less for their electricity than steelmakers in the UK. It is predicted that at the extreme, in 2020 UK steelmakers would expect to pay 280% more for the impact of government policies on electricity prices than American and Russian competitors. It is a similar picture for manufacturers producing cement, industrial gases and chloralkali, which provides the building blocks for thousands of products from energy-efficient building materials and solar panels to electronics and fibre optics. EEF, the manufacturers’ organisation, believes this proves conclusively that the absence of a global deal on climate change is creating a “beggar thy neighbour” approach, with different countries pursuing carbon reduction policies at different rates and costs, even within the EU. This puts British industry at a major disadvantage. Terry Scuoler, chief executive of EEF, said: "This report provides clear, independent evidence supporting concerns we have long put to the government, that UK manufacturers in energy-intensive sectors are paying more for their electricity than many of their global competitors. “Both the Treasury and Department for Energy and Climate Change believe we must not outpace our competitors in loading costs onto hard-pressed businesses. However, this report shows that there is a mismatch between intent and reality. “The proposed package of measures announced by the Chancellor in the Autumn Statement are welcome, but they only last until 2015. Similar measures must be put in place for 2015-2020 to give manufacturers certainty and a level playing field with their competitors.” Other Business Money News
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