A FIFTH of firms in the country's manufacturing heartland expect shut-downs and lay-offs if the predicted severe winter sets in, it emerged.

Research by Birmingham Chamber Of Commerce And Industry, which represents almost 4,000 companies with more than 300,000 workers, found that 90 per cent of its members were "extremely concerned" about energy costs and security of energy supply.

The chamber said the survey had also highlighted concerns that many firms did not appear to have prepared for an extremely cold winter by taking precautionary measures.

Charlotte Ritchie, policy executive at the chamber, said: "We can't be sure that such precautions will have any effect. But it is worrying that there is a large number of businesses which, although worried about energy shortages, have not taken any measures to minimise the potential impact on production. Any shortages are going to hit small businesses and those that are more energy-intensive first.

"We would urge those companies to think about what measures they can take now.

The poll also showed that 90 per cent of respondents had already absorbed the cost of steeply-rising energy prices, and 60 per cent said this was at the expense of profitability.

Ms Ritchie added: "Many our members are investing in energy-efficient practices and it is time that the Government took action to provide a secure energy supply for UK businesses.

"Energy, particularly security of supply, is of fundamental importance to nearly all business activity."

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A spokesman for the Department of Trade and Industry said: "It's only very heavy users of gas such as the chemical industry that could be affected if supplies get tight, but that's a small percentage of businesses overall.

"These firms will already have made preparations for a potentially cold winter.

"Increased gas supply from Belgium into the UK has just been brought onstream.

"It's one of a number of developments and facilities that will see the UK's gas supply capability rise by 28% by 2006/07 and bring a downward pressure on prices."