MANUFACTURERS in Lancashire will pay an unfairly high price unless the Government looks again at its policies on dealing with climate change, an industry leader has warned.

John Brown, chief executive of the Lancashire Association of the Engineering Employers' Federation said the Chancellor's pre-budget statement recognised difficulties manufacturers are facing.

But there was nothing for those businesses facing huge bills when the climate change levy is implemented in April.

"Taxes on travelling, consumption or waste are supposed to modify behaviour, so taxing energy use, for example, is meant to spur companies into action to avoid the tax," he said.

Mr Brown added: "The bulk of climate change levy will be paid by manufacturers but it spreads the benefit of reduced employers' NI contributions very thinly across the whole of business.

"Somewhat perversely, the levy will support service sector employment while many manufacturers say that the tax is so large that it will decimate profits and make investment in energy reducing measures even harder."

Mr Brown pointed out only 15 per cent of the levy will go into helping cut UK energy use.

He said the Government would be better opting for smaller, better targeted taxation which ploughs all the money raised into boosting renewable energy sources and improving energy efficient production.