Britain’s energy policy isn’t working for our energy intensive industries. A government-led industrial strategy is essential for companies in the heavy energy industries like steel, chemicals and ceramics if they are to succeed in the long run in our low carbon economy. A joint report published today in the House of Commons by the TUC and the Energy Intensive Users Group, Building our low carbon industries says 800,000 people work in the UK’s energy intensive industries. Their £95bn a year output is a fifth of the UK’s manufacturing total. And unlike some major employers, these companies contribute £12 billion in corporate taxes and levies. But without Ministerial action, jobs, investment and tax revenues could be lost to overseas competitors.
Speaking at the launch, Frances O’Grady, General Secretary Designate, TUC, will argue that these industries are integral to our green and sustainable future – producing products such as steel for wind turbines, glass for double glazing, recyclable packaging and plastic products. We have seen in the past the effects of a large scale industrial closures and the devastating effect that has on a region or locality and eventually on the economy.
Replacement jobs are hard to come by and are usually in low skill, high turnover, low paid sectors. Against this background, The TUC has welcomed the £250m energy costs support package now out for consultation. And the Business Secretary’s interest, restated last week at the TUC, in developing co-determined industry policy for these sectors.
This £250m package is targeted at those most at competitive risk – the electricity intensive industries, with high energy use and most exposed to trade competition. But we have three immediate concerns:
- The need for greater support for new technology investment.
- A support package on a par with that provided by our competitors: countries such as Germany appear to be providing much more support – we heard of a 5 bn euros annual support package in Germany.
- And a broader remit, because some heavy industries – the gas intensives, and those hybrid sectors like ceramics – need to be brought into the support framework.
For the future, the TUC would like to see:
- The creation of a permanent policy advisoryforum, perhaps building on the work of the Green Economy Council.
- Banking structures that invest in UK manufacturing and in green industry.
- An industrial transitional strategy through to 2020 on energy costs and technology investment, including support programmes comparable to our EU competitors.