"The paper industry survived the early 80s by establishing niche markets. Now that has been eroded," said the Paper Federations director of external affairs, Kathy Bradley.

Paper and board production fell by 6% in 2001 to 6.2m tonnes, meaning output had dropped to 1995 levels, while consumption fell by 3% to 12.5m tonnes.

"We were saying in the 80s that our industry would suffer if nothing was done to help us. Here we are in 2002 and our warnings have come true," Bradley said.
The Paper Federation is now urging the chancellor to consider the following issues in his budget:

* Avoid increases in tax or NIC charges to industry and duty on diesel fuel;

* Substantially increase landfill tax with exemptions for the recovery process;

* Allowing producers of electricity made from good quality CHP to be paid 0.43p per kWh on their export quantity;

* Extending enhanced capital allowances to all systems, controls and metering equipment aimed at improving environmental controls.

"When this government came in there was a feeling that we needed change. But it has been a great disappointment, has not listened and has not been a friend to the manufacturing industry," said Bradley.

Story by Andy Scott