Industry complaints about the proposed energy tax exaggerate its likely effects, according to environmental group WWF-UK.
A study for the organisation by the Ecotec consultancy, based on Office for National Statistics figures, concludes that the net cost of the tax would equal a maximum of 3% of sales for the most energy-intensive industries. This takes into account the National Insurance rebate which will be equal to the energy tax across the whole economy.
WWF said submissions to the House of Commons select committee on trade and industry by some trade bodies were exaggerated.
The Food and Drink Federation claimed the tax would cost its sector £150m, whereas WWF estimates the cost at nearer £87m. Likewise, the British Cement Association has estimated the cost to its members at £40m compared with the report’s figure of £14.7m.
Food manufacturing and the iron and steel industries are the largest net losers. The cost to the food industry, however, is likely to amount to only about 0.15% of sales.