British heavy industry has warned that companies will have to pay tens of millions of pounds in extra energy costs from next week if ministers do not extend an important support scheme.
According to a report in the UK's Financial Times newspaper, executives from some of the heaviest industrial energy users said they were calling on the chancellor to act before the scheme finishes at the end of March. Under the scheme, the government compensates certain energy-intensive sectors, such as steel and chemicals, for carbon costs that are passed through in the price of electricity.
Ministers last year extended the compensation for one year from January 2021 to March 2022 in the wake of Britain’s exit from the European Union and subsequently launched a consultation on the programme in the summer. However, if the relief is not extended, Britain’s chemical producers face extra costs of more than £27m on their electricity bills this year, according to estimates by the sector’s trade body, the Chemical Industries Association.
“We have provided them with extensive support, including more than £2bn to help with the costs of energy and to protect jobs.”
UK government spokesman
A government spokesman said it remained 'absolutely determined to secure a competitive future for our energy-intensive industries'. “We have provided them with extensive support, including more than £2bn to help with the costs of energy and to protect jobs,” they stated.
However, with tax levels rising to their highest level since the 1940s and debt interest surging to £83bn next year, any further spending is looking considerably less likely – especially in terms of a long-term financial scheme.
Source: Financial Times