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Alex warns Government on need for vital support to energy intensive industries

Uncompetitive energy costs are influencing, if not directing, the investment decisions of energy intensive industries, Alex Cunningham has cautioned, and unfavourable energy prices in the UK risk driving the sector towards more competitively priced markets across Europe and the United States.

The Stockton North MP’s warning comes amidst the tragedy that has befallen the steel industry, with thousands of jobs being lost across Teesside and many more being at risk around the country.

With the Government dragging its feet over an announcement about exactly when the compensation scheme for energy intensive industries can be expected, the Labour MP – who also co-chairs the All Party Parliamentary Group for Energy Intensive Industries – has urged the Business Secretary to take swift action to support the sector and avoid any further travesties.

Speaking during questions to the Department for Business, Innovation and Skills, Alex asked:

“Will [the Minister] give thought to other industries, such as chemicals, ceramics, paper and cement, with a view to providing sufficient compensation for them? They face greater competition, uniquely, because of the high cost of additional UK Government energy and climate change electricity taxes.”

While the Minister for Small Business, Industry and Enterprise reported that a decision at the European level has been taken to prioritise this matter, the Government was again unable to provide a definitive time frame for any announcement to be made.

Speaking afterwards, Alex said:

“While it is positive that the importance of this matter is being recognised at the European level, the failure to make real progress in this area should be ringing alarm bells for the Government.

“Uncompetitive energy prices are already leading to carbon leakage in the energy intensive sector, causing high profile closures and resulting in the loss of hundreds – if not thousands – of jobs.

“Energy prices are being distorted by the very high policy costs imposed in the UK compared to other countries. Energy costs for industrial users in the UK are around 45 per cent higher than in France, and as much as 70 per cent higher than in Germany – a competitiveness gap that is even wider still in comparison to the US and China where wholesale prices and policy costs are extremely low.

“I am clear that a failure to act quickly will further damage the capacity of businesses to invest here in the UK, undercutting the sustainability of the entire sector and placing many more jobs under threat.”