Saturday 30 March 2024

Labour: The Party of Deindustrialisation

Fraser Myers writes:

South Wales is facing deindustrialisation on a scale not seen since the Thatcher era, Labour’s shadow Welsh secretary, Jo Stevens, has warned. She was speaking outside the Port Talbot steelworks last weekend, where up to 2,800 jobs could soon be lost as part of a plan to ‘decarbonise’ UK steelmaking. Yet just a day later, Stephens was in Holyhead, north Wales, standing beside Labour leader Keir Starmer as he proudly announced his party’s plan to ‘decarbonise’ the UK’s electricity supply. A Labour government, Starmer promised, would set up a nationalised renewable-energy firm to help reach his party’s goal of a carbon-free electricity grid by 2030 – five years ahead of the Tories’ current target.

In the space of just a few days, Labour higher-ups went from bemoaning the destruction of industry, jobs and community that is being wrought by the Net Zero agenda to boasting about their plans to vastly accelerate the Net Zero agenda. What is going on?

There is no question that decarbonisation is the key driver behind the job losses at Tata’s steel plant in Port Talbot. Two of the factory’s traditional coal-burning blast furnaces are to be shut down and, with the help of a £500million bung from the UK government, replaced with low-carbon electric-arc furnaces. When the works are completed in 2027, only a tiny fraction of Port Talbot’s current 4,000 employees will be invited to return to the plant.

The prospects for the laid-off employees are bleak. Local opportunities are few and far between. One major Welsh employer has advised soon-to-be jobseekers that it has work available in north Wales, some 150 miles away, but not much locally. What’s more, these steelworkers will likely face a big pay cut. The median salary in UK steelmaking is almost £40,000 – not megabucks, but still around 50 per cent above the local average.

That barely scratches the surface of the devastation that is coming down the line. Jo Stevens, who grew up in Shatton, north Wales, knows this pain only too well. In 1980, when she was 14 years old, 6,500 people lost their jobs at the local British Steel plant overnight – the biggest single redundancy on a single day in western European history. ‘It took us decades to recover from it’, she said. ‘Pretty much every child in my school had family in the steelworks, and I’m really worried that the same thing is going to happen here.’ The downsizing of a major industry in a town like Port Talbot ripples well beyond those immediately employed there. Local businesses that service the factory, or serve the employees, end up going to the wall, too. Towns end up losing their identities. People end up losing hope.

Port Talbot’s decarbonisation project has major implications for the UK as a whole, too. Not only will the new electric-arc furnace require fewer staff to operate, it will also be incapable of producing virgin steel – the very type of steel needed for most manufacturing, including for the car industry and the defence industry. As it happens, the UK’s only other two blast furnaces, at British Steel’s plant in Scunthorpe, which is owned by China’s Jingye Group, are also closing. When they do, Britain will be the only nation in the G20 that cannot produce its own virgin steel.

Faced with this near obliteration of the UK steel industry, Labour has proposed a £3 billion ‘clean steel’ fund, which it hopes will persuade Tata to keep more jobs in south Wales. ‘The cavalry is coming in the form of a Labour government’, local MP Stephen Kinnock has promised.

But what Labour figures refuse to admit is that any short-term benefits of such handouts could soon be overwhelmed by the party’s green commitments. Existing climate targets are already pushing up electricity prices and placing strain on domestic energy production. Labour’s more stringent targets would only exacerbate these ruinous trends.

Keir Starmer’s plan for Great British Energy, a proposed state-owned renewable-energy company, rests on the oft-repeated fallacy that more investment in wind and solar power will cut household energy bills and protect Britain’s energy security. But nothing could be further from the truth. Even before the war in Ukraine sent energy prices into the stratosphere, bills were rising around the world thanks to our growing use of renewable energy.

Just take California, the renewables capital of the United States. Between 2011 and 2017, electricity prices surged at a rate five times faster than the rest of the US, thanks largely to California’s embrace of solar power and its abandonment of nuclear. This has triggered an exodus of blue-collar jobs to other states. Or take Germany, which has invested more in wind and solar than any other country on Earth. The so-called Energiewende, Germany’s policy of phasing out fossil fuels and nuclear energy, led electricity prices to rise by 50 per cent between 2006 and 2017, giving it the most expensive electricity in Europe. Today, as Germany struggles to wean itself of Russian gas, renewables have not come to the rescue. Its world-renowned industrial sector is now in serious trouble.

The link between renewable energy and higher energy costs is all too clear. And rising energy costs, in turn, are devastating for industrial productivity. UK steelmakers already pay far more for energy than they do in France (where nuclear power dominates), let alone major steelmaking nations like China or India, where the Net Zero agenda is being shunned.

And it’s not just higher energy costs that threaten to hurt industry under a Starmer-led government. A proposed mine in Whitehaven, Cumbria, which would produce the coking coal needed for traditional steelmaking and provide around 500 jobs, is vehemently opposed by Labour. Ed Miliband, shadow climate secretary, has said a Labour government would ‘leave no stone unturned in seeking to prevent the opening of this climate-destroying coal mine’. Labour’s hostility to traditional industry cannot be overstated.

The Labour Party also has the oil and gas industry in its sights – an industry that provides 200,000 skilled jobs across the UK, covers half of our energy needs and pays £10 billion to the exchequer every year. A Labour government would ban all new drilling licences in the North Sea, hobbling a vital resource and industry, and putting well-paying jobs at risk – all in the name of green virtue-signalling.

Labour’s zealous commitment to the Net Zero agenda puts it directly at odds with the interests of the British working classes. Its rush to ‘decarbonise’ energy and industry will deal a hammer blow to heavy industries and the communities they sustain. Labour has made itself the party of deindustrialisation.