From the TUC

Manufacturing security – TUC and CBI on same page

10 Aug 2011, by in Environment

The CBI’s report Protecting the UK’s foundations: A blueprint for energy-intensive industries, calls for the same sort of proposals that the TUC has been pressing for with the Energy Intensive’s Users Group. It wants a fair exemption from the carbon floor price, and support further development of energy efficiency technologies. Government needs to act swiftly to ensure the global competitiveness of the UK’s most energy-intensive manufacturers is not undermined by rising costs and climate change and energy policies. It’s uncannily like the TUC/EIUG studies, especially our last one, Technology innovation.  

Protecting the UK’s foundations: a blueprint for energy-intensive industries, argues that these companies form a crucial part of the manufacturing and supply chain and will play a key role in tackling climate change. Energy-intensive companies also employ 225,000 people in the UK and account for one percent of annual GDP (£15bn).

But the carbon floor price is making it increasingly uncompetitive for the most energy-intensive users to remain in the UK, and the CBI is calling on the Government to consider exempting these firms from the tax.

Katja Hall, CBI Chief Policy Director, said:

“Energy intensive industries underpin the UK’s manufacturing sector, making products as diverse as the steel and chemicals needed for wind turbines and low-rolling resistance tyres.

“The Government is in serious danger of throwing out the baby with the bathwater if it continues to pile new costs onto industries that are responsible for hundreds of thousands of jobs and bring in £15bn to the UK economy every year.

“Businesses accept that they must share the cost of moving to a low-carbon economy, but we simply cannot afford to price out this vital sector. The Government must ensure its autumn energy strategy looks at ways of exempting companies most at risk from the carbon floor price, while encouraging them to be as energy efficient as possible and use new technology to reduce emissions further.

“Unless the Government acts swiftly, there’s a real risk that these companies will decide it’s not cost effective to remain in the UK and simply relocate elsewhere.”

The CBI welcomed the Government’s recent impact assessment on its energy and climate change policies but argued it should go further. Rattled by criticism from industry and trade unions that it lacked a strategy for the energy intensive industries, the Government has set up a task group to produce a “policy package” by the end of the year.

The government is taking this seriously – at last. Environment Minister Greg Barker told the TUC’s annual climate conference in July that “decarbonisation mustn’t mean deindustrialisation”. He wanted to see a “new industrial coherence in climate change policy”. We must make things in the UK, the Minister argued.