Private manufacturers face bleak midwinter

A survey has revealed that the looming gas crisis threatening to engulf British industry this winter will put enormous strain on small to medium-sized manufacturers.

A survey has revealed that the looming gas crisis threatening to engulf British industry this winter will put enormous strain on small to medium-sized manufacturers, a leading business pressure group said today.

The Forum of Private Business (FPB) issued a warning to Government to get a grip on the crisis as it released findings of a survey of more than 1000 small to medium-sized firms in the manufacturing sector.

The survey reveals that the high price of gas - which has increased by a third in two years - is already hurting firms, with more than a quarter reporting that their business is threatened, jobs are at risk and production is down.

The picture becomes starker when confronted with the prospect of gas prices increasing this year, with well over a third saying their business would be at risk, jobs would be threatened and production would be reduced.

Meanwhile, if the rest of the winter is unusually harsh as the Met office has warned and gas supplies are reduced, more than half of manufacturers say production will reduce.

Well over a third report that reduced gas supplies would endanger jobs and threaten the future of the firm.

The survey is critical of the Government's handing of the crisis, with eight out of ten businesses rating communication with and advice to firms as 'poor' or 'very poor'.

The FPB's chief executive Nick Goulding said the survey should dispel complacency that any gas crisis would be a big business problem.

"We now see that many small to medium-sized manufacturers are at the mercy of gas supplies and prices," he said.

"Furthermore the Government that has failed to properly communicate with business.

There has been no guidance from Government on how to deal with gas shortages.

This has given the wrong signals and bosses are understandably worried because it looks disorganised.

This issue is not going away and there are nagging doubts about the inadequacy of the Government's current energy policy." Goulding added that the manufacturing sector is already finding trading tough.

He pointed to quarterly surveys by Small Business Research Trust in 2005 which found that employment in the manufacturing sector fell in three of the four quarters.

FPB member Mark Langdown, Managing Director of Dorset Flint and Stone Blocks of Andover Hampshire, said his firm employs 12 people and uses gas as part of the manufacturing process.

"The price of gas has risen considerably in the last two and a half years," he said.

"Any further increases would have a devastating effect on the small to medium-sized manufacturing sector".

"We face being hit from all sides by increased gas costs.

If there is a reduction in supply where are the alternatives? Oil company greed is a serious factor in this crisis too.

They are just rubbing their hands with glee.

The lack of a convincing Government energy strategy is worrying, as this problem is only going to get worse.

The Government is only just getting its head round recycling and that has been in the papers for 10 or 15 years." FPB member John Collier, chief executive of Monument Tools, Wallington, Surrey which employs 40 people, said he relied on gas to heat his factory to health and safety standards.

"I will be hopping mad if the gas is cut off," he said "And there is no guarantee the utility companies will supply you.

I am worried about the Government's energy planning.

It has lost sense of the priorities which are jobs and wealth creation not asbos.

We need to build more nuclear power stations.

There is no other way.

Surely we can not think we can rely on Russian gas supplies in the future, as Ukraine will testify." FPB partner Bill Poeton, who led manufacturing lobby group the Union of Independent Companies (UIC), said he is 'worried to death' by the prospect of a gas crisis.

"If a crisis hits small to medium-sized firms will feel the pain most and jobs and businesses will be on the line as monthly costs soar," he said.

"All of this will be good news for the oil firms and China where costs are so much cheaper.".

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