A recent survey of member companies by the BPF, the leading UK trade association representing polymer producers, distributors, converters and recyclers, revealed that 44% have not been able to pass on the increased costs to customers. Davis says: " Last October member firms incurred average increases of 58% for gas and 56% for electricity; indeed many faced a staggering 100% rise. Companies will go to the wall if they cannot secure relief. Meanwhile, our competitors in Europe, with unnliberalised energy markets, are paying less and rubbing their hands at our loss of competitive advantage."
According to the BPF survey, large-scale job losses can also be attributed directly to the price rises. Forty-eight per cent of respondents admitted being forced into making redundancies by an average of 6.5% of their workforce. Meanwhile, 54% have scaled down investment plans, while 10.5% are "seriously examining" re-locating manufacturing to elsewhere in Europe or the rest of the world.
Davis says: "In the past 18 months the plastics sector has faced escalating energy prices, spiralling raw material and increased pensions and insurance costs. In addition there has been the extremely unpopular Climate Change Levy."
Davis has written to UK Energy Minister, Malcolm Wicks, with a view to a meeting, to suggest a number of remedial measures, including suspending the Climate Change Levy until the end of 2007, and more use of energy from waste incineration and nuclear power. He adds: "The Government admits there could be energy shortages until at least late next year, primarily because we now import much of our gas, and the pipelines and storage infrastructure for this are not yet fully in place. I have also written to Financial Secretary to the Treasury John Healey to emphasise how hard the Climate Change Levy is hitting my members."
