[Sep 2005]

Business Leaders Sound The Alarm Over Threat From Soaring Energy Bills

Runaway energy prices are posing a serious threat to British businesses and the public sector, energywatch will warn today (Tuesday) in Brighton.

The gas and electricity consumer watchdog and business leaders from across Britain to spell out to Energy Minister Malcolm Wicks MP how rising energy bills are stifling the UK economy.

CBI chief, Sir Digby Jones, will also attend the breakfast meeting.

Allan Asher, Chief Executive of energywatch, said: "Every business - from the smallest corner shop to the largest factory - is suffering. Our public services are also being seriously undermined by rising energy costs and that means we are all suffering, as more of our taxes go to pay those bills."

Jeremy Nicholson, Director of the Energy Intensive Users Group, said:
"Energy prices are now the greatest threat to the competitiveness of British industry. If prices stay at these levels, companies in the energy intensive sectors will be pushed to the brink, driving another nail in the coffin of British manufacturing."

There are dozens of examples of the damage of rising energy prices on businesses, which include:-

• The UK paper industry is rapidly losing ground to its European competitors as gas price hikes mean it is paying at least 35% more for its energy and costing it an extra £90 million a year.
• British building material manufacturers are paying almost 50% more for their gas than their competitors in France and Germany and double that of those in Spain.
• For just one major chemicals company, rising energy prices have meant additional costs in the order of ten of millions this year alone.
  
  Spiralling energy costs are also causing huge damage to the retail sector. Kevin Hawkins, Director General of the British Retail Consortium, said:
  "Every retailer in the UK is currently facing significant increases in their gas and electricity bills - in many cases this is as high as 50 per cent. Combined with other cost increases and the fact that consumers are being more cautious than ever with spending patterns it means that retailers' margins are being squeezed from both sides."
  
  energywatch will also warn how taxpayers are bearing the brunt of staggering rises in gas and electricity bills, as public sector bodies divert more money away from frontline services to cover their energy costs.
  
  There are also numerous examples of the impact of energy bills on the public sector, including:-
• The NHS gas bill alone has risen by at least £41 million, or 57%, - money that could have paid for more than 4,000 heart bypass operations.
• Local authorities across Britain are having to find an additional £120 million a year for their gas and electricity, enough to pay for 6,000 teachers, social workers, police officers or even 12 new school buildings. In Kent, one of Britain's largest local authorities, an extra £2.1 million has been added to its annual energy bills.
  
  Allan Asher said:
  "If British businesses are being forced to pay double the price for their energy than their European counterparts, they are going to suffer. The same goes for the public sector - if public bodies have to find an extra 50% to pay their energy bills, that money has to come from somewhere." Mr. Asher said the finger of suspicion pointed firmly at the gas producers. "Something is seriously wrong when British businesses and taxpayers are having to pay so much more for their energy while the big offshore producers are awash with revenue. The problem is that the market is broken, and unless it's fixed it will only get worse." Media inquiries:
  Julie Read 020 7799 8482 (m: 07787 761857)
  Georgina Walsh on 0207-799-8348 (m: 07734 884426)
  Madeleine Burbidge on 0207-799-8367 (m: 07770 433433)
  
  
  
  ENDS
  
  
  

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