The Government’s proposed energy tax would wipe out the £194m of savings British Steel plans to make through merging with Dutch rival Koninklijke Hoogovens, the company’s chairman said this week.
Sir Brian Moffat issued the warning at the announcement of British Steel’s annual results on Monday.
The steel industry estimates the tax would cost it almost £240m, while the rebates it could claim through National Insurance would amount to just £5m.
Moffat’s comments came on the back of continuing criticism by manufacturing industry of the climate-change levy proposals. It has complained that the tax, as structured, would do little to curb emissions of CO2 and other greenhouse gases but would seriously damage Britain’s competitiveness.
The Engineering Employers’ Federation’s Sheffield Association worked out that a large engineering business in the city would be looking at a £750,000 increase in energy costs versus a potential NI rebate of £51,000 – a disparity, it said, that was likely to mean the immediate loss of 40 jobs.
A lone dissenting voice came from the Chartered Institution of Building Services Engineers, which welcomed the proposed levy as `a real incentive to encourage energy efficiency in buildings’. But it said the tax was not large enough to provide `a major incentive’ to consumers and should be increased along the lines of petrol duties.
* Feature, page 18