"Flawed" energy tax is damaging manufacturers

Manufacturing News, Source : TheManufacturer.com
Published : 01 Nov 2002 9:41

The recession hit manufacturing sector has suffered more than any other from the Government’s Climate Change Levy,

according to a report by the Confederation of British Industry (CBI) and the Engineering Employers Federation (EEF).

Manufacturers saw energy costs rise by £328 million but received back only £185 million, and have paid out an extra £143 million in the first year of the tax, which they believe has made them less competitive as a result.

By comparison, service sector companies, with generally larger workforces and typically lower energy use, appear to be the main beneficiaries of the reduction in National Insurance Contributions.

Digby Jones, CBI director-general, said: "This survey shows the Climate Change Levy is damaging key sectors of the UK economy and driving jobs abroad. It's crazy to pile on extra costs when manufacturers are struggling to remain competitive, and all employers are bracing themselves for next April's increase in National Insurance Contributions."

Martin Temple, director-general of the EEF, said: "To continue with the Climate Change Levy as currently designed makes a mockery of any commitment to support manufacturing and, with over half of firms in the recession-hit sector less competitive as a result of this tax, it makes the government's new manufacturing strategy look increasingly worthless. "

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