THE Government's green tax on energy will cost millions of pounds for industry in East Lancashire.

A survey by the Chamber of Commerce has found that the Climate Change Levy, which will be introduced on April 1, will add almost 14 per cent to companies' energy bills.

The Government has claimed that the change would be "fiscally neutral" because it would be offset by a reduction in employers' National Insurance contributions.

But according to the survey, manufacturing companies will have to pay more.

A total of 66 East Lancashire companies responded to the survey and the results were analysed by the Chamber's energy service providers Utility Auditing Limited.

The analysis showed that the 66 companies would be faced with additional bills totalling £1.18 million a year, even after taking reduced National Insurance payments into account.

One of the companies involved in th survey was textile manufacturer Cloverbrook Ltd of Burnley. Director Michael Bartle said the tax was unfair to business.

"It is not being equally applied across Europe and the rest of the world," he said. "Factories without wet processing cannot collect a rebate and, in our case, we have one factory that qualifies and one that does not."

"The extra cost burden will make us less competitive in the market place."

Mike Booth, company secretary of Shire Inns, said: "The Government's intentions are commendable, but the Climate Change Levy is penalising certain sectors such as the hospitality business."

"The Government says that companies will break even on the tax due to National Insurance rebates, but that is certainly not the case in our company and the hotel sector in general."

Jeff Wealands, managing director of Utility Auditing, said: The results of the survey prove conclusively that the manufacturing sector will bear the brunt of this invidious evnergy tax."