Michael Fallon announced on Monday that the government will bring in new measures to shield heavy industry from rising energy prices.
He warned there is “a clear and present danger” the UK could lose jobs in the steel and chemical industries without action. A competitiveness gap between Europe and the US “is becoming unbridgeable”.
Existing compensation and exemptions for industry “are not enough”, Fallon told delegates at Edison Electric Institute’s International Utility Conference. “We should look at relief from other policy costs.”
Next week’s budget is expected to include a freeze in the carbon floor price. The green tax has come under fire from businesses as it places a burden on UK customers not faced by European competitors.
Fallon appeared to confirm the rumour, saying: “Next week’s budget gives us the chance to underpin our commitment to manufacturing.”
Manufacturers’ association EEF welcomed the speech. “With UK energy costs resulting from energy taxes, spiralling out of control this is putting a brake on investment and seriously risking jobs in our most energy intensive industries,” said chief executive Terry Scuoler. “The Chancellor has every opportunity to significantly address this issue at the Budget.”