EEF, the manufacturers’ organisation, gave a positive response to the recommendations of the House of Commons Trade and Industry Committee report on Fuel Prices published today (Wednesday).
EEF welcomed MPs’ acknowledgement of the damaging competitive impact of rising fuel prices, and in particular backed the Committee’s calls for a review of the Climate Change Levy to ease the burden on UK industry.
EEF, which gave written and oral evidence to the Committee inquiry, also supported calls for the DTI to take a more active role in monitoring both transparency and competition in the wholesale gas market.
The Committee’ conclusions also backed EEF’s view that while the pace of liberalisation in European energy markets remained slow, the UK will continue to be competitively disadvantaged, and that more concerted action is needed from UK government and the European Commission.
Martin Temple, EEF Director General said:
“This is a thorough and balanced report which shows that UK business is suffering serious loss of competitiveness as a result of rising fuel prices, and calls for government to re-examine policies to ease the burden on industry must not go unheeded.”
“The Committee is right to call for a review of the Climate Change Levy and to consider the scope for reducing a tax that has added to industry's costs while having limited success in reducing emissions.”
“The report also shows that the government must take clear account of their competitive impact before introducing measures in support of its goals to reduce emissions levels."
1. In late 2004 EEF commissioned research by Global Insight (GI) to analyse the key drivers pushing up energy prices. This identified two main determinants: (1) The recently launched EU Emissions Trading Scheme - which the report estimated accounted for around one-third of energy cost rises and (2) Gas Prices - accounting for the remaining two-thirds of rises. In total estimates by EEF using the forward prices in the GI report and official data on historical electricity and gas prices and on energy usage in manufacturing shows expenditure by manufacturing on electricity and gas rising from £4.2bn in 2003 to £6.0bn in 2005 – an increase of £1.8bn.
2. EEF, the manufacturers' organisation, has a membership of over 6,000 manufacturing, engineering and technology-based businesses and represents the interests of manufacturing at all levels of government. Comprising 11 regional Associations, the Engineering Construction Industries Association (ECIA) and UK Steel, EEF is one of the UK's leading providers of business services in employment relations and employment law, health, safety and environment, manufacturing performance, and education and skills.
3. For further information contact:
Andrew Parkinson, Campaigns Manager
t: 020 7654 1540
m: 07984 802 374
e: aparkinson@eef.org.uk
Stephen Radley, Chief Economist
t: 020 7654 1530
e: sradley@eef.org.uk