A new report, 'Tackling Industrial Energy Costs', published by Make UK sets out solutions which the Government should place at the heart of its strategy. Among them the reform of complex and unfair policy levies that make low-carbon energy more expensive than fossil fuels.
These levies are currently applied only to UK industrial bills and not across the rest of Europe - reform would cut energy costs by 15% immediately and if coupled with an agreed fixed energy price for Britian’s manufacturers, the resulting cost reduction would be significant.
A fixed energy price would see the UK Government paying manufacturers the difference if the cost of energy went above the agreed “strike” price, while manufacturers would pay Government if the cost of energy fell lower than the agreed rate.
This approach would place UK manufacturers on a par with European industrial energy bills.
According to Stephen Phipson, CEO Make UK, “If we do not address the issue of high industrial energy costs in the UK as a priority, we will fail to attract investment in the manufacturing sector and will rapidly enter a phase of renewed de-industrialisation.”
Phipson warned that inaction risks compounding the UK’s current disadvantage and would result in the government having to make difficult choices over costly bailouts or support the managed decline of the UK manufacturing sector.
