Is Coalition setting UK industry adrift?
4 Mar 2011
London – For all the Government’s talk of it becoming a champion of industry and an industry-led recovery there seems to be widening separation between manufacturers and the corridors of power at Westminister.
Recent evidence of an industry policy drift can be seen in the reaction to the UK government’s proposed Electricity Market Reforms and “Floor Price’ policy for carbon.
These policies will accelerate investment in low-carbon electricity generation, including nuclear power – at the expense of the rest of industry.
The concern is that these moves could undermine confidence and investment, particularly in the UK’s energy intensive industries. Already struggling to emerge from recession, many companies in these sectors are now facing spiralling energy and feedstock costs.
Industry accepts that addressing climate change comes with a price tag, said Terry Scuoler, chief executive of manufacturers’ organisation the EEF. But, he added, “we are rapidly reaching a tipping point where companies who are internationally mobile will say enough is enough.
“We cannot keep adding layer upon layer of cost and complexity without damaging our competitiveness and threatening future investment in UK plants.”
Likewise, Ian Rodger, UK Steel director, said: “The Treasury acknowledges that this proposal will push up UK electricity prices, yet has failed completely to look at the impact of this on energy intensive sectors such as steel.
“The UK Steel industry shares the government’s objectives, but a fundamental re-think of the complex policy mix is called for if these objectives are to be achieved at an acceptable cost.”.
However, the view that these concerns are not being taken seriously was echoed recently by Labour MP Tom Blenkinsop who took up the energy-intensive users’ case in the House of Commons.
The MP for Middlesbrough South and East Cleveland MP said he received “a weak and rather unconvincing reassurance” that the Government would work with industry to ensure that these policies would not damage the manufacturing industry.
“I have had regular dialogue with industrialists working in the chemical and steel industry and they are very concerned that this Government does not understand or particularly care about manufacturing …
“Companies like Tata, Sabic, Lucite and GrowHow, and the chemical cluster NEPIC in our area, are very concerned about this - as well as their workers and their union representatives. This is just another example of [the government] … ignoring the highly skilled industrialists who keep our economy ticking.”
