SMMT says Energy Bill Discount Scheme falls short

The Society of Motor Manufacturers and Traders has urged the government to do more to support the automotive industry absorb rising energy costs.

The government has announced a new scheme to replace the Energy Bill Relief Scheme, which expires in April, but the Energy Bill Discount Scheme will reduce rather than cap energy costs for businesses and will last for 12 months.

However, businesses can only benefit from the scheme when electricity and gas bills are high; only when prices reach £107 per MWh for gas and £302 per MWh for electricity or higher will companies receive discounts.

Mike Hawes, SMMT chief executive, said: “A new energy support scheme to help all businesses next winter is welcome. Energy remains the second largest automotive manufacturing input cost and UK businesses already face the highest electricity costs in Europe.

“However, automotive will not qualify for the additional higher-level support afforded energy intensive sectors, despite being one of the UK’s largest exporters and trade intensive sectors, and facing energy bills that cripple its competitiveness. The upcoming Budget should go further, therefore, allowing vehicle producers and suppliers to qualify for additional measures in line with energy intensive industries, ensure climate change agreements are maintained and energy efficient capital investments are incentivised.”