Businesses and unions call for gas supply to be safeguarded

WEST Midlands businesses and unions are calling for urgent Government intervention to protect industry from gas shortages.

They are warning that UK supplies of gas have been running perilously low and that the consequences of this are harming firms and stifling employment.

Temporarily running out of gas altogether would be disastrous for many businesses, claim organisations including the British Chambers of Commerce, the TUC and the British Ceramic Confederation.

Rules governing procedures in the event of chronic shortage state that many manufacturers which rely on gas for production would have to shut down at very short notice.

That could cause millions of pounds of damage to some sectors, critics claim, while others would lose orders.

At the moment, sites are exempted from shutdown if the potential damage to factory equipment from gas supply interruption is more than £50m. Domestic consumers are protected by separate rules.

Ibstock Brick, which has sites in Walsall, Kingswinford, Cannock, and Newcastle-under-Lyme, has warned supply interruption could cause “serious damage”.

Wayne Sheppard, the firm’s managing director, said: “If we have to turn off our kilns at short notice it could cause extremely serious damage. The £50m threshold is much too high and it needs bringing down immediately.

“In the medium term, price fluctuations and uncertainty over supply make it much harder to make investment decisions. That uncertainty needs to be tackled, and developing storage infrastructure and safety stocks are essential.”

During March, gas prices varied between 75p per therm and £1.50 per therm as a result of concerns over supply – in particular when an interconnector at the Bacton gas terminal in Norfolk failed.

Dr Laura Cohen, chief executive of the Stoke-on-Trent-based British Ceramic Confederation, said: “In March there were times when there was almost no spare gas in the UK – and we believe supply interruptions are inevitable in future unless action is taken immediately.

“The Department of Energy and Climate Change has to bring down the £50m damage threshold before it’s too late. Too many vital industries are excluded by the existing levels.

“In addition, there needs to be some mechanism that allows phased shutdowns of plant like the large tunnel kilns used by brick makers. Just flicking the switch on these could cause very serious damage.”