CBI's energy fears for businesses
November 9, 2005
A fifth of West Midlands manufacturing firms expect shut-downs and lay-offs if a severe winter sets in, a poll shows.
Birmingham Chamber of Commerce and Industry found 90% of its 4,000 member firms were extremely concerned about energy costs and security of supply.
The chamber said the survey showed concerns that many firms had not prepared for an extremely cold winter.
It found 90% had already absorbed the cost of rising energy prices, with 60% saying it was hitting profitability.
'Think about measures'
Charlotte Ritchie, policy executive at the chamber, said: "Energy, particularly security of supply, is of fundamental importance to nearly all business activity."
She added: "It is worrying that there is a large number of businesses which, although worried about energy shortages, have not taken any measures to minimise the potential impact on production.
"Any shortages are going to hit small businesses and those that are more energy-intensive first. We would urge those companies to think about what measures they can take now."
The CBI said a large number of members were investing in energy-efficient practices and it was time that the government took action to provide a "secure supply" of energy for businesses.
The Department for Trade and Industry said the fears were unfounded.
Oil price highs
At the end of September, CBI chief Sir Digby Jones warned that "inadequate" planning meant that the UK only had enough gas in reserve to supply firms for 11 days.
Fears of a winter gas shortage come as supplies in the UK North Sea decline and the reliance on imports grows.
Domestic gas suppliers have recently increased prices by as much as 15% in some cases. They claim the prices rises are a result of steep rises in wholesale costs of gas.
And the price of crude oil recently reached record highs of $70 a barrel amid fears over the effect of Hurricanes Katrina and Rita, but prices are now beginning to fall back slightly.
Chancellor Gordon Brown has said the rising cost of oil is a global problem which needs a global solution and has appealed to oil producing countries to increase supply.
Energy consumer group Energywatch has also called for the government to intervene to secure lower prices.
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