The manufacturers’ organisation EEF has warned that there are continued fears that rising energy prices are “potentially diverting investment and threatening growth”.
It added that green energy taxes are hitting large and small businesses and the chancellor needs to act to help protect British business.
The organisation’s third annual survey revealed that the cost of energy is now the aspect of the UK business environment they are “most negative about”, while rising energy costs are perceived to be the biggest threat to growth.
Half of the 300 respondents said that a commitment from government to keep energy costs at, or below, the EU average would be “the single biggest factor” in encouraging manufacturers to expand their UK operations.
The EEF is calling on Osborne to freeze, and then reduce, the carbon floor price, which it estimates will make up to 10 per cent of a large industrial user’s electricity bill by 2015; to the shield “vital” energy intensive industries, such as the steel and chemical sectors, from “excessive energy policy costs by addressing the costs of the Renewables Obligation and small scale Feed in Tariff; and to extend the current energy intensive industries package to at least 2020/21.”
Terry Scuoler, EEF chief executive, said: “Rising energy costs represent a major threat to growth and could damage efforts to support and sustain long term recovery.”
He added: “Many manufacturers now feel that they are being severely penalised by high energy costs, some of which are being unilaterally imposed and, are not shared by competitor nations.”