Rising oil prices could spell disaster for UK glass makers, unless the Government takes steps to ease the problems facing the industry, ministers were told at talks on 22 August 2004.
Bureacracy, st…
Rising oil prices could spell disaster for UK glass makers, unless the Government takes steps to ease the problems facing the industry, ministers were told at talks on 22 August 2004. Bureacracy, strict emission limits and steeply rising costs have been blamed for industry cuts, resulting in the loss of 36,000 manufacturing jobs in 2004. The leader of the British Glass Manufacturers“ Confederation met officials at the Department of Trade & Industry, in a bid to secure the survival of the UK glass industry. David Workman, the director-general of Sheffield-based British Glass, which represents most of the UK“s glass manufacturers, warned the DTI that high oil prices and environmental charges are threatening the viability of the sector. He is concerned that firms will have to dramatically cut investment and possibly jobs to cope with the crippling energy costs. Mr. Workman said glass makers wanted to know what the Government“s strategy was on energy generally, and particularly in relation to business. “It“s about the long-term survival of the industry. They (glass manufacturers) will survive in the short-term by cutting back investment”, he said “We have got a massive amount of environmental legislation that“s going to be very costly. These sorts of cost increases are unparalleled.” The steep rise in oil prices comes on top of the Climate Change Levy, which helps the Government meet its commitment to cut greenhouse gases. The levy is costing the industry nationwide an estimated GBP 4 million a year. The levy was introduced in April 2001, as part of the Government“s strategy to reduce the UK“s greenhouse gas emissions by 12% by 2010. It taxes companies“ energy use, and partly offsets this through a reduction in employers“ National Insurance Contributions. Glass manufacturers expect costs to rise even higher when the European Union Emissions Trading Scheme comes into operation in 2005. It will set a cap on the overall emissions from 1,300 UK sites which are major energy generators or users. Mr Workman said talks with Adrian Gault, the DTI“s director of energy strategy development, were intended as a prelude to a meeting with Trade & Industry Secretary Patricia Hewitt, to discuss ways of easing the cost burden. Mr Workman said he also wanted an explanation as to why energy bills faced by business in the UK had risen by between 30 and 50%, compared to average increases of just 10% in France and Germany. A spokesperson for the DTI said oil was traded on international markets, and it was not for the Government to intervene directly, although it welcomed OPEC“s move to increase production. She added: “The Government is concerned about high current oil prices and the impact they have on consumers and businesses. But it is worth noting that in real terms current oil prices are around half the levels reached in the early 1980s.”