EEF, the UK manufacturers organisation, has accused the government of being 'in denial' over the impact of high energy prices on companies and possible threats to the security of supply over the coming winter.

The comments were made in response to remarks by the Prime Minister in the Commons that the UK has the cheapest energy prices in the EU and, evidence given to the Environmental Audit Committee by the Secretary of State for Trade & Industry suggesting that heavy energy users may see an effect if there is a harsher than normal winter but that domestic users would see no impact.

“Far from having the cheapest energy prices in the EU, UK companies are currently facing the highest gas prices,” said Martin Temple, EEF Director General. “These remarks smack of complacency and we are now at the stage where we can only conclude that government is in denial over this issue and it is industry that is now paying the price."

"Whilst we do not want to turn this into a crisis and, hope that the current increases in gas prices are a short term spike, such remarks by Ministers are not helpful and imply to companies that government does not understand the situation," added Mr Temple.

Earlier this autumn, EEF published a survey of 371 companies which showed that 93% had experienced an increase in energy prices over the last twelve months with average weighted increase in gas prices of 47% respectively. These rates are more than double the level of increases reported in 2004.