Bosses' plea for help with 'unfair burden'

BRITISH companies are being forced to pay an extra £700m a year for their gas and electricity because of the failure of the European energy market to open up to full competition.

The Energy Intensive Users Group, which represents industries such as chemicals and steel, has appealed to the Government to help create a level playing field for business.

Jeremy Nicholson, the group's director-general, said: 'British business is at a huge disadvantage compared with competitors on the Continent. We are being forced to pay far higher prices for gas and electricity compared with our competitors.'

In the past 12 months, energy prices in the UK have soared by 50% as oil and gas supplies from the North Sea start to dwindle and Britain depends more on Continental suppliers.

Nicholson said Britain had the most liberalised energy market in the world, but the Continental market was highly fragmented and dominated by national gas supply monopolies.

The consequence was that while the UK sector was open to all, British companies found it hard to gain access to cheaper Continental supplies. After years of protests, the UK Government has responded by putting pressure on the European Union to take action against countries that have failed to open up their markets.

The EU has now agreed to investigate the way the sector operates and has announced that it is prepared to take action against countries that are dragging their feet over liberalisation.

A report last week by the Commons Trade and Industry committee confirmed that the European market lacked transparency and that many countries lagged behind Britain.

Committee chairman Martin O'Neill said price disparities between the UK and European competitors were likely to last for at least two years.