100,000 jobs to go in crisis
UP to 100,000 factory jobs will be lost unless more is done to tackle Britain’s energy crisis, MPs will warn this week.
The stark message will add misery to families already struggling to keep up with the high cost of living, as the credit crunch risks becoming a full-blown recession.[>
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The Business and Enterprise select committee’s report, due to be published tomorrow, is expected to say that high energy prices may “affect the competitiveness of the UK and put thousands of jobs in manufacturing at risk”.[>
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It comes as millions of consumers face massive winter fuel bills after power giant EDF raised prices by up to 22 per cent, forcing customers to find, on average, an extra £200 a year.[>
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Consumer watchdog Energywatch warned that “inevitable” copy-cat rises from the other five major energy companies would lead to 5.5 million households being thrown into fuel poverty, where energy bills are more than 10 per cent of their income.[>
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Campaign director Adam Scorer said: “The scale of these rises will be a hammer blow to many. All big six companies raised their prices already this year and now you can be sure that the rest will follow EDF’s lead.”[>
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More than 100,000 manufacturing jobs were axed when gas prices last peaked two years ago, said the Office of National Statistics. The same could happen again, as firms which require intensive energy use for production find themselves unable to continue operating.[>
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Britain, which used to enjoy plentiful North Sea oil and gas, is no longer self-sufficient and must rely more on Continental supplies. Gas imports are expected to account for 40 per cent of demand next year, compared with two per cent in 2003, while wholesale prices have increased by 130 per cent. The Government is pinning its hopes on nuclear power, although this will not hit the national grid before 2016.[>
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“The warnings of massive job loses seem to confirm all the other evidence that there are serious problems ahead,” said Tory Oliver Letwin. “The Government has failed to make Britain less dependent on fossil fuels.”[>
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Gas storage facilities remain woefully inadequate. Britain has 19 days of reserves, compared to 99 days in Germany and 122 days in France. In addition, Europeans are used to buying on long-term contracts to offset future price rises, while Britain relies on short-term buying.[>
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Britain is seen as a “desperate customer” in the winter and is not offered gas on the same terms enjoyed by other nations. [>
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What’s more, a quarter of Britain’s generating capacity will shut down in the next few years because it does not meet EU emission rules, which threatens to create a “dark Britain” around 2012.[>
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Gas and electricity prices remain linked because gas is used to produce 40 per cent of our electricity. Some experts point the finger at the “anachronistic and redundant” indexing between gas and oil prices.[>
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Mr Scorer said: “The link between oil prices and gas dates back to the days when plants wanted to be able to switch from one to the other but it has nothing to do with gas supply. The sooner this link is broken, the sooner we’ll see gas prices fall to their correct levels.”[>
