A recent survey by Make UK reveals that Britain’s manufacturing sector is on the brink of collapse due to soaring energy prices. With costs significantly higher than in Europe and the US, many companies are struggling to survive, with a quarter considering relocating production overseas. This trend could lead to a substantial loss of jobs and investment in the UK.
The impact of high energy prices is immediate and severe. Nearly half of the surveyed companies reported increased energy bills since the onset of the conflict in the Middle East, forcing many to pass these costs onto consumers. Despite attempts to raise prices, 98% of firms anticipate a squeeze on profitability, leading to delayed investments and job cuts.
Make UK is urging the Treasury to intervene by covering the taxes and levies that contribute to these high costs, similar to measures in France and Germany. The current government subsidy scheme, while helpful, is not expected to take effect until 2027, leaving many firms at risk of bankruptcy in the interim.
The reliance on gas for electricity generation exacerbates the situation, with the UK more dependent on gas than its European counterparts. As manufacturers face these challenges, the call for urgent action grows louder, highlighting the potential for widespread economic repercussions if the situation remains unaddressed.
Source: The Guardian
