A trade and industry committee, led by Labour MP Martin O'Neill, is to launch an inquiry to examine why industrial energy users are facing rises in energy costs higher than European competitors'.

A number of paper producers have cited rising energy costs among reasons for planned price increases.

CPI director of business affairs Graham Barnard welcomed news of the inquiry and said the rise in energy prices could not be justified by the increase in oil prices. Barnard said that the CPI, along with the Energy Intensive Users Group, had continually sought to discuss the issue with the government.

"[It] is a situation which is causing the prices in the UK to remain much higher than our European competitors," said Barnard.