In Paris, climate chiefs posture. And here? Our suicidal green taxes throw families on the slag heap
Buy Chinese steel to save the planet? That’s just bonkers
WHAT do Samantha Cameron’s titled ancestors, an Indian steel manufacturer, green taxes, a UN summit on climate change and the imminent threat to the future of one of our great Northern towns have in common? The workers of Scunthorpe and their families know the answer.
In The Open Hearth pub, near the 2,000-acre complex of gigantic mills and high-tech chimneys that is the Tata steelworks, the mood is as bleak as the weather. ‘In the plant, the atmosphere is terrible,’ says John, a steelman. ‘Everyone is terrified we’re about to lose our jobs. They bailed out the banks. Why can’t they bail out steel?’
John’s friend, Alan Glenworth, chips in: ‘It’s not just the people who work there, but the thousands who depend on it. If the works closed, this would be a ghost town.’
Like thousands of others employed in British heavy industry, these workers are reeling from the punitive levies imposed by the Government on manufacturers’ energy bills. More than half of these levies go to subsidise renewable energy.
Most developed countries have signed up to emissions reductions and renewable energy subsidies. But in 2011, George Osborne introduced a further, unilateral burden, making it even harder for energy-intensive industries such as steel to compete with cheap foreign imports – the ‘carbon price floor’ tax, which is set to rise indefinitely. No other country has taken such a step. The UK’s’ green levies have already destroyed one major industry – aluminium smelting.
It might seem a long way from Scunthorpe to UN summits on climate change. But with the next global conference – the 21st – set to start in Paris tomorrow, it is clear their fates are linked. And it’s why Scunthorpe faces ruin.
Until the late 19th Century, this was a tiny village, one of five in the area now covered by the town. From 1864, when its first foundry opened, it grew swiftly to become a major centre of iron and steel production, driven largely by the Sheffield family, the residents of a stately home at nearby Normanby Hall. Sir Reginald Sheffield, the current head of the family, is Samantha Cameron’s father.
The number of workers directly employed by Scunthorpe steelworks has fallen from 25,000 in the 1970s to just 4,500 now. Tata recently announced a further 900 redundancies and warns that unless it can find a buyer for the plant by the end of March, the remaining jobs may go – and with them, the jobs of a further 15,000 people in contracting and other local companies.
Tony Gosling, a Tata plant union leader, Labour councillor and keen local history buff, says: ‘Without the steelworks, you’d have to question whether Scunthorpe would even exist.’
This month, Gosling and his union colleagues organised a 1,000-strong demonstration through the town, under the campaign slogan Save Our Steel. Families turned out in force, joined by church leaders, retired people and schoolchildren.
‘The steelworks is the heartbeat of the town,’ says marcher Canon Moira Astin, vicar of St Lawrence’s church.
Taxi driver Abul Sardar tells me: ‘I saw the impact of the last round of redundancies in 2012. People stopped going out, stopped spending money.
‘I used to work eight or ten hours a day, five days a week and made a living, paid my mortgage. Now, forget about ten hours. It’s 18, seven days a week.’
David Aunin, manager of the Foundry shopping centre, fears the impact of redundancies may already be starting. This month, an advert for 12 vacancies at a toy shop attracted 500 applicants.
In Scunthorpe, and in other towns and cities across Britain that depend on energy-intensive industries, electricity prices paid by British industrial users are already double those in Germany, and at least 30 per cent higher than in the rest of Europe – let alone in countries such as China.
Now, an eye-watering one-third of industrial electricity bills is accounted for by green levies and subsidies for renewable energy. To put it another way: steel, a ‘foundation’ industry critical to construction and all other manufacturing, is being crippled to pay for wind farms and solar panels.
Thousands more steel jobs – not only at plants owned by Tata – are also at risk in Sheffield, the North East, Scotland and South Wales. All this gives the developing world an enormous competitive advantage, despite the fact that its industries are dirtier, and produce much higher emissions.
While Tata is cutting jobs in Scunthorpe, it is opening a new plant in eastern India, close to the coalmines and coal-fired power plants that will be its energy source. Scunthorpe’s Labour MP, Nic Dakin, says: ‘It’s not a level playing field. The irony is that, if Britain ends up using Chinese steel because we’ve got green taxes, their steel works are far less carbon-efficient. It’s absolutely bonkers. We’ll be buying carbon-intensive steel from China in the name of saving the planet.’
Those who defend the green status quo insist the reason for the steel industry’s plight is not green taxes but lower Asian labour costs, and the ‘dumping’ of steel at knockdown prices by China. A Tata spokesman refutes this, saying that in the past two years, the firm has paid £150million in green-energy levies. In a fiercely competitive industry, this represents the difference between profit and loss. Moreover, one reason China can afford to dump steel is that its energy costs are so much lower.
Manufacturers in Germany and other EU countries have long been given partial exemptions from the cost of renewable subsidies. British manufacturers have been promised rebates since 2011, a pledge Osborne repeated last week, but even if they get the necessary approval from the European Commission, the respite may be brief.
Last week, the Government’s Committee on Climate Change unveiled its ‘fifth carbon budget’, saying that, by 2030, almost all UK electricity will have to be from non-carbon sources. This transformation is likely to cost some £350billion – and that, ultimately, will come from energy taxes and bills.
About the gloomiest person I met in Scunthorpe was David Wyner, a GMB union representative. He had just spent the afternoon ‘consulting’ with Tata over whose jobs would go. ‘It’s not fun,’ he says. ‘The people whose jobs are going, I know them.’
In The Open Hearth, Alan Glenworth takes a sip of his pint. He says: ‘The young lads who’ve been at Tata ten years, who still have mortgages – if they lose their jobs, what are they going to do?’