Thousands face lay- off if big freeze takes a grip

A WINTER freeze threatens to cripple industry and cause thousands of workers to be laid off because of a gas shortage, a crisis summit heard.

With the Met Office forecasting the coldest winter for a decade, industry leaders said Britain was ill- equipped to cope with the subsequent rise in demand for energy.

Factories could be forced to cut their gas consumption by around 30 per cent and some major companies may be ordered to cease production, they warned.

The doomsday scenario follows months of spiralling gas and electricity prices which have hit both consumers and industry.

The problems stem from the fact that Britain is no longer self- sufficient in gas from the North Sea and relies on imports from Europe along with supplies held in storage.

However, storage supply is woefully short and there are fears that foreign suppliers could withhold gas should a big freeze hit Europe.

Jeremy Nicholson, head of the Energy Intensive Users Group, which represents industry, told the summit in London: ‘The question for this winter is whether there is going to be enough gas to put into the system.

‘Even in a one-in-ten cold winter, which is a realistic probability, we would need to see a reduction of gas consumption of around 30 per cent from the industrial sector over a 40- day period.’ Some major companies may choose to stop production because their gas bill would rise so high it would cost them too much to stay open, said Mr Nicholson. He added: ‘ We could start approaching an emergency situation where large industrial producers get compulsorily cut off from the system.

‘That is a worst- case scenario, but it is realistic.

‘ Thousands of people would be laid off. For the economy as a whole, that would be very serious.’

The Met Office has said there is 65 per cent chance of a winter freeze in which temperatures do not rise much above zero for weeks.

Contingency plans have been drawn up to ensure there is sufficient gas to keep the central heating on in homes, hospitals and schools.

These include saving the gas used to generate electricity by turning down the voltage in the mains, thus dimming lights across the country.

Gas will also be diverted to power stations to generate enough electricity to keep the lights on.

However, the summit was warned of emergency measures to conserve power supplies of the like not seen since the three- day week of the miners’ strikes in the 1970s.

Andrew Bainbridge, chief executive of the Major Energy Users Council, which hosted the summit, said: ‘I don’t think this is scaremongering. There are good reasons for getting worried. There are shudders in many boardrooms.

‘ I have never experienced such a traumatic period. The UK industry is in a heck of a mess and the future for the customer looks bleak. Prices have sky-rocketed.’

Energy Minister Malcolm Wicks said recently: ‘We could have a tight winter. It’s not about switching off the domestic customers but there could be problems for industry.’

However, he dismissed the predictions of widespread factory closures and lay- offs as alarmist.

s.poulter@dailymail.co.uk