BUSINESS leaders in Bury and Bolton are getting hot under the collar over a new energy tax on business.

Now, Bolton and Bury Chamber has started a campaign to stamp out the tax.

Bosses stress that the energy tax, combined with the recently introduced Climate Change Levy, could add 20 per cent to the bills of energy-intensive companies.

In partnership with its energy service providers Utility Auditing Ltd, the Chamber is campaigning against the Renewables Obligation, which is due to be introduced in January.

The Renewables Obligation is a proposed tax on energy suppliers to encourage them to generate electricity from renewable sources. But the Chamber believes that it will not motivate suppliers to go green because they will not have to pay the penalties direct as they are entitled to pass costs on to businesses.

As well as alerting local MPs, the Chamber has used the British Chambers of Commerces' (BCC) lobbying power to take the issue direct to the Chancellor.

Jeff Wealands of Utility Auditing said: "This is a laudable project to reduce CO2 emissions and is the equivalent of The Climate Change Levy for suppliers.

"However, suppliers will be allowed to pass through the levy to the end user and, therefore, have little incentive to adopt renewable energy."

He added: "We are aware that some suppliers are building in an amount to cover the extra cost, which equates to a real increase of between two per cent and 3.5 per cent to large users in the current marketplace.

"Added to the extra burden of the Climate Change Levy, some energy intensive companies could see an overall increase in their electricity costs of 20 per cent in less than 12 months."