Energy tax could cost engineering 57,000 jobs

Engineering will bear the brunt of the job losses likely to result from the Government’s proposed energy tax, according to a report out today. The study, by economic consultant Business Strategies, estimates that 57,000 engineering jobs will be lost if the Government proceeds with its tax proposals. The figure makes engineering by far the worst-hit […]

Engineering will bear the brunt of the job losses likely to result from the Government’s proposed energy tax, according to a report out today.

The study, by economic consultant Business Strategies, estimates that 57,000 engineering jobs will be lost if the Government proceeds with its tax proposals. The figure makes engineering by far the worst-hit group within the wider manufacturing sector, which in total could lose more than 115,000 jobs.

A further 60,000 are expected to go within the service sectors.

Martin Temple, director general of the Engineering Employers’ Federation, one of four industry bodies backing the research, warned that the climate change levy will `severely damage our competitiveness’ and drive production to less environmentally friendly economies.

`No other piece of proposed Government legislation in recent times has appeared to discriminate so heavily against manufacturing industry,’ he said.

Within engineering, fabricated metal producers are expected to sustain the biggest job losses, at more than 17,000.

And engineers in the Midlands, Wales and the north east will be hardest hit, losing more than 1% of their workforce.

The Business Strategies’ report will heap further pressure on the Government to amend its proposals for an energy tax, following a critical response to the plan from the influential Labour-dominated House of Commons Trade and Industry Committee on Monday.

In its own report, the committee said the levy risked becoming `a blunt instrument which damages sectors of the economy already struggling to maintain their profitability’.

The MPs have called for tax exemptions for electricity generated from renewable sources and nuclear power, and provisions for energy intensive businesses to limit damage to international competitiveness.

They also recommended linking the level of tax to the carbon content of fuels – a move that would almost certainly finish off the UK coal industry.