22 October 1999

Energy tax cost shock

GOVERNMENT plans to introduce an energy tax would send UK-made fertiliser costs soaring, with dire consequences for manufacturers and farmers alike, warned the Fertiliser Manufacturers Association this week.

"As an industry we fully support the objectives of energy efficiency and we have a good record for making significant improvements," said FMA president William Tooley.

"However, none of our international competitors will face a levy of such severe proportions. Without special provisions, the ammonia and fertiliser industries face a very bleak outlook indeed."

Government suggestions that manufacturers can recoup costs through reduced National Insurance contributions are irrelevant given the sectors low labour use, he stressed.

"Much intense lobbying remains to be done to minimise the damaging effect of this new tax."