The British furniture industry has raised concerns over a government directive that encourages energy companies to burn wood for fuel, arguing that any increase in the price of wood could have an extremely harmful effect on their business. A report detailing the industry’s worries, commissioned by the Furniture Industry Research Association (FIRA), was launched at a meeting in the House of Lords last week, with a view to increase awareness of how the Renewables Obligation Woody Biomass Subsidy is having a detrimental effect on furniture manufacturers and retailers, such as Fashion For Home.
In conjunction with the British Furniture Confederation (BFC), FIRA launched the report at the House of Lords to enable them to share their findings with parliament, ensuring that relevant MPs were invited to attend. FIRA has held a number of summits this year to discuss Biomass directives and how they are effecting business for the furniture industry. The report details the outcomes of these summits, which were a coming together of industry leaders to look at how government directives that encourage the burning of wood by power companies are forcing the price of new timber higher and higher, in turn forcing the cost of lounge furniture collection manufacture and retail to increase as well. The industry will now use the report to lobby the Government on behalf of furniture wholesalers, retailers and manufacturers.
The report details a list of recommendations on ways the government could ensure that manufacturers can continue production without having to face the difficulty of rising prices caused by the Renewables Obligation Woody Biomass Subsidy. Since the biomass subsidies were introduced, timber prices have increased by 55.1 percent in 5 years, which is having a noticeable effect on the furniture industry’s profitability.
It is also likely that these increased production costs will result in job losses across the industry. A great number of furniture manufacturers base their operations in areas where there are already limited employment opportunities. If the UK furniture industry was to disappear, close to 5,000 workers would find themselves unemployed.
The increased cost of production will undoubtedly lead to an increase in product prices for consumers, which raises eyebrows as the subsidy paid for the burning of renewable fuel is paid by the consumer through their utility bills. Consumers are therefore paying for renewable energy which distorts the market against them, both as a consumer and also to the British manufacturing industry.
FIRA suggests that rather than using virgin wood as fuel, timber that is at the end of its usefulness should be used instead, ending the practice of sending old and broken furniture to landfills.