Sir John Redwood
High energy prices, bans on making and extracting things, changed UK tariff policies and high taxes are a toxic mix. The factory and company closures are coming thick and fast, doing grave damage to the UK industrial base and losing us many jobs.
There are the pending closures of most of the bioethanol industry. It makes fuel from grains. Both the large Redcar and Hull works are at risk, and closure has begun. Bioethanol was meant to be one of the bright spots for green growth, offering a fuel that is to be gradually introduced into petrol and into aviation spirit to cut their fossil fuel dependence. E10 petrol is 10% ethanol with more to come. Sustainable aviation fuel is promised and that could also require bioethanol. The abolition of the 19% tariff on US imports has been the final blow to an industry hit by higher energy and employment costs.
These closures put at risk domestic CO2 supply as this is also produced at one of the plants. It will cut demand for wheat and grains from UK farms damaged by government tax changes. It is another set of policies undermining UK economic security and forcing us to find the money to import more. Imports mean paying the wages and taxes of overseas countries, not our own. How do we earn our living?
We have just seen the closure of two large refineries at Grangemouth and Lindsey, making us more dependent on imported fuels and oil products. The damage at Grangemouth is not over yet, with the threat that the large olefins and polymers petrochemical plant will also have to close, driven out by high energy costs. Sabic has announced its closure of another olefins plant at Wilton with the possible loss of 330 jobs.
An industrial nation needs to produce more of its own fuel and chemicals if it is to retain the businesses dependent on these basics. The UK was an important exporter of refined oil products to the EU as well as meeting more domestic demand. Taken together with closing down of our own oil and gas production which could have fed these works, we are witnessing an industrial disaster.
The ceramics industry has been in full retreat for some time. This has also been badly hit by dear energy which it needs for its kilns. This year Royal Staffordshire and Moorcroft have closed, following on from Johnson Tiles last year. Great names of a once flourishing industry are now available for foreign producers if they want to buy or licence the brands. Most of the jobs and tax revenues pass elsewhere. Wedgwood has announced this week a 90-day manufacturing pause as it has too much product for current sales levels. High costs of energy are a problem.
Nippon Electric has decided to close its large glass fibre facility in Wigan with another 250 jobs to go. Dunbar Cement says it will stop producing 700,000 tonnes a year that is needed by the construction industry owing to cost pressures. The UK is moving over to more imports of cement, just in time for the CBAM high tariff to deter imported CO2 heavy products being introduced. This will add to UK construction costs. At Birtley the aluminium extrusion plant is being shut. Three aluminium door and window manufacturers are cutting capacity. The government wants construction-led growth, but it is casually allowing the production of building materials to pass abroad, diluting the beneficial jobs effect of more building.
Jaguar Land Rover’s car output is currently halted owing to a cyber-attack. It is also the case thar the car industry is struggling to sell its new emphasis on electric cars to the non-fleet buyer, and is actively closing its substantial capacity to make petrol and diesel cars ahead of the 2030 ban.
The Government needs to wake up to the reality. This is not a series of one-offs. It is not a chain of bad luck from different sources. It is the direct result of very expensive and unreliable energy, of bans on activities and of tax changes that make it dearer and less attractive to make things in the UK.
The collapse proceeds outwards from the bad decision to wind down the UK oil and gas industry prematurely and abruptly with bans and early closures, leading to the closure of petrochemicals and other feedstock dependent businesses. Dear energy lies behind the collapse of our blast furnace steel making, our glass industry, and all other energy-intensive industrial activities.
We choose instead to buy from a China that uses masses of cheap coal, and from an EU that still uses plenty of coal and gas, with some of that gas still bought from Russia. Why is the government so mad keen on imports, and so negative about UK industry? Why the bans on making petrol cars here from 2030 when elsewhere they will still be made? Why agree to the closure of the Gryphon platform in the North Sea which could still be used to bring more oil and gas ashore? Another bizarre tragedy.Can we end this self-harm? Can we go for cheaper energy and understand that using our own gas would be so much better for jobs and taxes than turning to imports? Policy is even boosting world CO2 output at the same time. We need to make more things to help pay for the NHS and get more people back to work.
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