Press release – Covering on Cost of Energy

Posted on: August 17th, 2022 by EditorM

CBM calls on Government to widen energy support for ‘forgotten’ smaller manufacturers

Hundreds of small to medium-sized manufacturers are being frozen out of new plans by the Government to support businesses who are high energy users.

The stark warning came from the Confederation of British Metalforming (CBM), who are predicting that thousands of jobs could be at risk if these smaller businesses are not given similar levels of assistance to the ‘big boys’.

Under current plans, the UK government is consulting on the option to increase the level of exemption for certain environmental and policy costs from 85% of costs to 100%, but this will only apply to about 300 businesses that are directly involved in making steel, paper, glass, ceramics and cement.

Companies further down the supply chain are being ignored again by Whitehall despite the UK metalforming sector directly accounting for 300,000 jobs.

Stephen Morley, President of the CBM, commented: “We’ve challenged this approach before, yet it seems to fall on deaf ears with ministers who appear to be more inclined to help a select few, rather than the many.

“Our members, who are predominantly small to medium-sized manufacturers in the supply chain, are faced with an impossible conundrum. Many were asked to renew and fix charges based on a 4x increase in electricity costs, something that is simply not commercially viable.

He continued: “The issue is 4x has now become 6x, so a good number of companies are chancing their arm by embracing the ‘day ahead’ market and hoping that the situation with Russia/Ukraine improves, we have a mild winter and domestic users cut back on their usage.

“There is a lot of ifs, buts and maybes there and a lot that can go wrong. However, some bosses feel they have no choice but to play the game as locking in will mean business failure. How can you run a business on so much speculation and why aren’t they worth of support.”

The Confederation of British Mealforming, which supports 200 companies involved in the manufacture of fasteners, forgings and pressings and fabrications, is continuing to lobby the Government on this issue and is requesting urgent meetings with Ministers to get them to extend the consultation.

It is also asking for SMEs to have their say by coming forward and writing to their local MPs to highlight the impact of energy cost increases on their businesses and what they need to survive.

Stephen concluded: “There does seem to be a reluctance to look further down the supply chain by this Government and we are determined to change that. The top tier firms employ thousands of people, but the SMEs employ hundreds of thousands more and these are jobs are important to protect.”

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