The UK must speed up the switch to alternative energy sources to protect the country from the impacts of rising oil prices, business leaders have urged.
The group of companies warned that in the wake of the Gulf of Mexico oil spill, tightened regulation of deep water drilling could see oil prices rise, threatening the UK economy within the next five years.
Sir Richard Branson, founder of Virgin Group, one of the businesses in the UK industry taskforce on peak oil and energy security, said the disaster in the Gulf of Mexico had increased the chances of an “oil crunch” in the coming decade.
He said: “This will lead to much higher sustained prices which will in many ways rival the impact of the credit crunch of 2007 on UK growth, jobs and stability.
“The time to take out our insurance policies against such an outcome is now.
“We must do this to avoid the horrible shocks to the UK economy which will be mirrored in many other parts of the world.”
The taskforce, which includes companies such as Arup, Solarcentury, Stagecoach group, Scottish and Southern Energy and Virgin, said deep water drilling would become increasingly important as it was likely to provide 29% of new capacity by 2015, compared to 5% today.
A Department of Energy and Climate Change spokeswoman said: “We agree we need to change how we produce and consume energy, that’s why we have a clear strategy to make sure the lights stay on.
“We are taking three big steps forward right now, in creating a market for energy savings through the Green Deal, ensuring a properly functioning electricity market, and a strengthened carbon price.
“Through this leadership, the low carbon revolution can be driven by entrepreneurs, the private sector and local communities.”