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Page 17 Contractors World - UK & Ireland Vol 1 No 5

Hard work still needed to secure £200 billion investment in energy

The CBI has recently commented on the Government ’s Electricity Market Reform White Paper published recently. John Cridland, CBI Director-General, said “This White Paper is an important step in the right direction, but the hardest work is stll to come. There is much to do if we are to secure the £200 billion of essental investment needed in our energy infrastructure, including a mix of nuclear, clean coal, gas and renewables. The big decisions remain to be taken.

We have long called for our electricity markets to be reformed. The Government’s package contains some good measures, including its decision on feed-in tarifs. But these need to be made to work.

“More detail is needed on tariffs, and the case must be made for a capacity mechanism. We need a clear decision on both by the end of the year to avoid damaging investor confdence.“Everyone wants to make our energy infrastructure more secure and sustainable for the future, but businesses cannot be expected to write a blank cheque. The Government stll needs to spell out what it thinks the fnal bill for all of its electricity market reforms will be.

“Some energy intensive industries are already on a knife edge, and without help to shield them from new measures like the carbon foor price, they could struggle to stay in the UK.”

Source: CBI

quarter, with only a small rise in private commercial activity preventing even sharper falls. The greatest falls were seen in public non-housing such as educaton and health and with the public sector spending cuts already taking efect this will only exacerbate the situation. Furthermore, at a time when tender prices and profitability remain under extreme pressure, persistently high materials price infaton is making operatng conditions extremely challenging for firms operating throughout the construction industry.

“Some manufacturers during Q2 benefited from Sterling’s attractiveness relative to both the euro and dollar and increased their export sales, resultng in an additonal 18 per cent of manufacturers turning to overseas markets compared with the previous three months. This has been a welcome bounce back from the poor conditions experienced during the winter months, but there remains a great deal of concern regarding the year ahead given that we have not yet seen the full impact of the public

sector cuts and the Associaton forecasts that constructon output will fall in 2011 and 2012. The government has stated that constructon is at the heart of its growth strategy for the UK economy and, as it accounts for around 10% of the UK’s economy, it is vital that investment in essental schools, hospitals and housing is maintained at levels that will provide the basis for economic recovery.”

Speaking about the survey Stephen Ratclife, Director UKCG, said “Market conditons remain tough. Government has not just cut back on capital investment. It is also reviewing many programmes (such as school building) and is devolving responsibility to local decision makers. Hence, the picture on forward public investment remains prety murky. Clarifying this is the single most important step government could take to help the industry ride out these tough tmes.”

Julia Evans, Chief Executve of the Natonal Federaton of Builders added “It is stll of great concern to members of the Natonal Federaton of Builders that lending to constructon contnues to fall, dampening the prospects of a private sector-led recovery. Constructon experienced the highest rate of insolvencies of any industry in the second quarter, a sure sign that weak demand, extremely compettve pricing and rising costs are all having a destructve efect on the industry which will contnue to be felt for years to come.”

Source: Constructon Products Associaton

Construction News - Industry Briefing

Noble Francis, Economics Director, the Constructon Products Associaton

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