INDUSTRIALISTS are urging the Government to cut green taxes and slow down or even reverse the closure of old power stations to tackle the growing energy crisis.
Master Cutler Tony Pedder called for “bold measures” from the Government to tackle the prohibitive cost of energy and close the gap between demand and available supply.
Speaking to the Yorkshire Post, the chairman of Sheffield Forgemasters said the price of energy and concerns over security of supply are deterring investment in the UK and acting against the rebalancing of the economy.
Senior Ministers have repeatedly insisted that they want to tilt the UK economy away from financial services and the South East towards manufacturing and the North.
In a speech in Sheffield last night, Mr Pedder said: “The Chancellor will give his Autumn Statement on Thursday. We need bold measures to be announced on energy.
“Prices in the UK are too high and the gap between demand and available supply is too tight.
“We need some scaling back of the climate change add-ons which damage price competitiveness, particularly for energy-intensive industries.
“We need some slowing down of old power station closures and possibly even some short-term refurbishing of some to bring capacity back up quickly.
“My priority right now – and I thought it was that of our politicians – is to see some resurgence of our manufacturing sector, some rebalancing of our economy and the creation of some more solid, quality jobs.
“An uncompetitive energy supply scenario is the wrong recipe for that.”
The Master Cutler told the Freemen’s dinner that the Chancellor must find a way to get prices down for industry as well as the public, encourage new suppliers into the market and extend relief for energy-intensive industries until at least 2020.
Peter Birtles, a director at Sheffield Forgemasters, said his business is paying more than twice as much as competitors in Europe, even on an interruptible supply tariff.
This means that during the winter months the company is asked to “switch off”, often at short notice, which leads to a loss in productivity and delays for customers.
But some work cannot be interrupted – it would damage material, processes and equipment – which means that Forgemasters can be hit with a punitive tariff up to ten times as much the usual cost, said Mr Birtles.
He called for more gas-fired power stations to be built in the short term and a more enthusiastic approach to shale gas and fracking.
The chief executive of Tata Steel Europe added his concerns. In a statement to the Yorkshire Post, Karl Koehler said: “Our UK manufacturing plants face electricity costs that are as much as 50 per cent higher than for our key competitors in France and Germany. A substantial part of this disparity is the cost of green levies on UK industry introduced by successive governments over the past decade. If the Chancellor wants an industrial recovery to rebalance the economy he must show a real commitment to fair energy costs for foundation industries such as steel.”
Tom Crotty, a director at chemicals group Ineos, told the Financial Times that the UK is at “crisis point”. “We will not have an energy intensive sector in this country in 20 years’ time,” he said.
The industrial heartland of South Yorkshire is home to many energy-intensive manufacturing firms, generating hundreds of millions of pounds in revenues, employing thousands of people and attracting major investment from foreign-owned companies.
Alison Kinna, UK managing director at Outokumpu, the world’s largest stainless steel maker, told the Yorkshire Post: “We have real concerns about the cost of energy in the UK.
“We have seen America take a real leap forward with the use of shale and we need to make sure we have a balanced and long-term energy policy that can sustain energy intensive industry for the long term.”
A spokesman for the Department for Energy and Climate Change said: “As we reform the market to attract new investment into our energy infrastructure, it is vital that we do not undermine the competitiveness of UK industry.
“Energy-intensive manufacturing is central to strengthening our industrial base and rebalancing our economy. These industries are significant employers and play an important role in the low carbon economy through the products they manufacture.”
Big six agree to limit bill increases
The Big Six energy companies agreed to limit increases to household bills, giving some relief to Prime Minister David Cameron on an issue that has angered voters and given opponents a potent line of attack before a 2015 election.
Soaring energy costs have become a big political issue since Labour leader Ed Miliband said in September he would freeze consumer bills for 20 months if he wins power.
Energy Secretary Ed Davey said the changes to electricity and gas bills, which will form part of the Government’s twice-yearly budget update to parliament on Thursday, would save the average household £50 each year.