Tees Valley Budget

Partner Article

£7 billion support for manufacturers is Budget highlight for North East business

George Osborne’s £7 billion suite of energy price cuts for British manufacturers is among the Budget highlights for North East firms, a panel of top regional businesspeople say.

The Chancellor’s extension of the existing compensation scheme for energy intensive industries for a further four years was welcomed as key for the region’s heavy industry.

A new compensation, worth almost a billion pounds, will also be introduced to protect energy intensive manufacturers from the rising costs of the Renewable Obligation and the Feed-In Tariffs.

Mr Osborne name-checked steel makers, chemical plants and paper mills as beneficiaries of the measures, and promised half of the firms who directly benefit are in the North.

NECC policy adviser Rachel Travis said: “The North East has the most energy intensive business base of any region in the country, so measures to support these industries will be hugely welcome.

“We have already seen the negative impact of uncompetitive energy policy in this region and we hope these measures will help secure some of our most important businesses in this region in the coming years.”

It was also announced that Combined Heat and Power plants, used by many manufacturers, will be exempt from the carbon price floor.

Speaking at the Tees Valley Unlimited Budget Live event, LEP chief executive Stephen Catchpole said: “The North East is a big emitter of carbon, and there had to be some measures to stop our heavy industry being pushed overseas.

“I’m really pleased to see these measures which are bound to be of benefit to the region.”

The Forum of Private Business called for the concessions to extend further than big business.

Chief executive of the Forum, Phil Orford, said the focus on energy intensive businesses was welcome, but smaller firms could still be missing out.

However, North East regional chairman of the FSB, Ted Salmon, said: “We are pleased to see how seriously the Chancellor is taking the cost of energy. Without addressing the issue, especially in manufacturing, jobs could be lost to abroad.

“Our first quarterly Small Business Index for 2014 shows utilities remain the main cause for rising business costs for more than half of small firms and as a result the FSB has continuously called for action on energy taxes and increased transparency in energy prices.

“Small firms want these overheads reduced, and for reforms to energy markets to make the market fairer for these customers.”

This was posted in Bdaily's Members' News section by Tom Keighley .

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