Sir Keir Starmer detests everything about Boris Johnson. But in one respect, at least, the current PM sounds just like the great fabulist — endlessly proclaiming that the UK will be a “green energy superpower”. It is meaningless as well as bombastic, but Sir Keir was at it again last week, when he announced minor concessions to exasperated carmakers over the date by which they would have to stop producing internal combustion engine vehicles and be fined unless they sold an increasing state-mandated proportion of electric vehicles every year.
“Some country’s going to win the race when it comes to renewables and the change to net zero … and I want us to win that race” said Sir Keir, perhaps to reassure those in his party dismayed that his decision to exempt those producing fewer than 2,500 cars a year from the 2030 deadline means that the wealthy gas-guzzling customers of Aston Martin and McLaren will have a dispensation denied to the rest of us.
Actually, there is one sense in which we are winning the race — that is, the race to deindustrialise by offshoring our carbon emissions and calling it global leadership. It has been achieved by imposing ever larger “green levies” on industrial energy users, in effect fining them for emitting CO2. Or, to quote the UK’s leading energy economist, Sir Dieter Helm, Britain’s industrial energy prices “are higher than in the EU and around four times the prices in the US. No companies are flocking to the UK to gain access to the promised low energy prices, which were to be the result of switching from fossil fuels to renewables.”
The reverse, in fact: they have decided to flock off. The latest example is British Steel, whose Chinese owner, Jingye — backed by the lobby group UK Steel — says that our “world-beating” high energy prices are making it impossible to maintain the UK’s sole remaining “virgin steel” manufacturing plant without vast subsidy: the firm has even been reported to be offering some of the 2,700 threatened employees jobs in its Chinese operations.
Since Jingye — whose bosses are no angels — has now stopped purchasing the coking coal required to keep the Scunthorpe blast furnaces ticking over, Starmer recalled parliament (a political stunt, as this was not necessary) to approve ministerial powers directing such a purchase at the taxpayers’ expense. The coking coal is being shipped in from the Far East.
In the fervid eyes of Ed Miliband, the messianic secretary of state for energy security — now there’s a joke — and net zero, this is much more virtuous than sourcing coking coal from under British soil. In November, he declared that in a “clear signal” to the world, he was banning any new coalmines in the UK. This, as The Times then reported, “means the end of plans for Britain’s first new deep coalmine in nearly three decades. West Cumbria Mining had hoped to build a mine near Whitehaven to extract metallurgical coal for steelmaking rather than for coal power generation.”
Anyway, the rest of the world has duly taken note of Miliband’s “clear signal” … and laughed. Not just China, which recently instituted a generous scheme for new coal plants (allowing 50 per cent of the capital costs to be offset against a levy on bills), but even more populous India. Last month, the country’s minister for coal and mines — yes, they have a minister especially for that — celebrated on X: “India has crossed a monumental 1 BILLION TONNES of coal production! This achievement will fuel our increasing power demands, drive economic growth and ensure a brighter future for every Indian.”
The UK’s last remaining coal-fired power station closed last year: instead we have Drax, which was converted (in the name of “net zero”) to burning wood pellets imported on a vast scale from across the Atlantic, and which last year, on the grounds that trees are “renewable”, was granted yet another subsidy, paid in our energy bills, of £869 million.
Miliband and Starmer — who claimed last week he was “pragmatic” on net zero, presumably to distinguish himself from the man behind the policy — are now closing down the North Sea for new business too. So much so that Just Stop Oil announced that it has won its battle and is to disband this month.
The owner of the Ineos chemicals group, Sir Jim Ratcliffe, got the point. He announced in February that his oil refinery in Grangemouth — Scotland’s last — would close, to be reconfigured as a mere import terminal (with the loss of hundreds of jobs). Oil will continue to be used here, just not from the North Sea.
The government insists there will be no loss of employment; quite the contrary, because “green energy” will provide the “jobs of the future”. But not so well-paid, it seems. A report in 2022 by the consultancy EY, commissioned by the Scottish government, showed North Sea oil workers have an average salary of £88,000 a year, while those in the oil and gas supply chain earn an average of £51,000. This is not just well above the average Scottish salary of £29,000 but also the average “clean energy” sector salary of £42,600, according to the pro-renewables Energy and Climate Intelligence Unit.
• Jim Ratcliffe: Green policies will kill petrochemical industry
This is hardly surprising. The more productive an industry is — that is, the more value each worker supplies — the higher its salaries will be. It is a tribute to the extent of the value added by North Sea oil and gas that successive governments have been able to impose extraordinarily high levels of taxation on it, far higher than on any other industry.
A glimpse of what this means, on a global scale, was provided last week by the Resolution Foundation — whose director until recently, Torsten Bell, is now a Labour Treasury minister. In a report tellingly entitled “Yanked away”, it observed that productivity in the UK suffered an “almost unprecedented” plunge over the past five years, and contrasted this with the US, which was “the only G7 economy where productivity growth has accelerated in recent years”.
And what was the Resolution Foundation’s first suggested reason for this? “US productivity growth has been boosted by a continued boom in oil and gas extraction.” But it’s not just that oil and gas is an immensely productive form of energy generation. The US development of shale gas (which successive governments have thwarted in the UK) led directly to the much cheaper industrial energy prices that, in turn, have seen the chemicals business steadily migrate from Europe to America.
It won’t take Donald Trump’s tariffs to cause the remnants of our own energy-intensive industries to relocate to the US or die. The British government is already achieving that through its own perverse policies.
