Business

Spending Review: Big energy users promised help with costs

  • 25 November 2015
  • From the section Business
Tata Steel Scunthorpe Image copyright Getty Images

Big energy users such as the steel and chemicals industries will be exempt from environmental tariffs, Chancellor George Osborne has said.

The steel industry was plunged into crisis this year, with the closure of plants and thousands of job cuts.

"Green" levies that kept energy bills higher were partly blamed by the industry and unions for the crisis.

The steel industry praised Mr Osborne's move, but union leaders said it would do nothing for the long-term future.

The chancellor announced: "We're going to permanently exempt our Energy Intensive Industries like steel and chemicals from the cost of environmental tariffs, so we keep their bills down, keep them competitive and keep them here."

He said it would give energy intensive users long-term certainty.

Earlier this year, it was announced that SSI's steel plant in Redcar was closing, and that Tata Steel is to cut jobs at its plants in Scunthorpe and Lanarkshire.

Critics blamed cheap Chinese imports and UK environmental tariffs that meant competitors had lower energy bills.

'Enormously welcome'

Roy Rickhuss, head of the steelworkers' union Community, said: "Yet again the chancellor has failed to fully understand the crisis facing the steel industry.

He said "short-term measures around business rates and environmental and energy costs" might encourage steel producers "to hold their nerve and preserve skills".

But "there was nothing to reassure us" about the long term future of the industry, he said.

However, Gareth Stace, director of UK Steel, said the change was "was enormously welcome and demonstrates that the government is dedicated to finding a long term solution to this problem".

The government had already put in place a compensation scheme to answer the concerns of high energy users.

But Mr Stace said: "With a move to an exemption rather than compensation, government has ended this uncertainty and we can now look forward to a more level playing field in terms of energy prices for our steel plants."

Autumn Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Explained: Which government departments will be affected?

Analysis: From BBC political editor Laura Kuenssberg

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT


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