WITH most of the workforce now having left Rio Tinto Alcan in Northumberland the furore over one of the most major industry closures in recent years has died down.
However, the apparent concern about energy pricing (a BIS report last week showed UK businesses pay double the amount in renewable subsidies and carbon emission subsidies than their European competitors enjoy) combined with woeful GDP figures should lead to some innovative thinking about how government might prevent other ‘high energy user’ companies from collapse.
There was certainly a range of factors affecting Rio Tinto’s decision to pull out of Lynemouth, but there are also common factors that apply to other employers in the UK’s steel, cement and other key sectors.
High energy user companies collectively contribute £95bn to the economy and employ 160,000 people directly and thousands more through supply chains. The Energy Intensive Users Group (EIUG) has warned that these jobs are at risk due to the uncompetitive energy pricing issues in the UK and any future investment is more likely to be lost to overseas competitors .
A new report by EIUG, Building Our Low-Carbon Industries, says that in recent years UK heavy industries have significantly improved their energy efficiency and are now much greener than many of their global competitors. But the high cost of energy and the technology needed to move across to a low-carbon economy put further green progress at risk without a meaningful and effective industrial strategy.
One cruel irony is that if we do lose more UK-based companies, not only will we lose jobs and major contributors to the economy, it is likely that we will end up importing products from locations with much worse carbon outcomes than ours.
The Government can’t afford to take risks with this critical part of the UK economy. Care is needed now to ensure the UK doesn’t experience any further Alcan-style closures, paying close attention to those high-energy user businesses seeking to develop technologies and practices to mitigate carbon emissions and to support a transition to a greener future that doesn’t result in the loss of thousands of jobs.
This Government is lacking a strategy that is linked to both energy and environmental policy. That requires changes to the rules so that the green investment bank is able to borrow when it becomes operational next year, allowing much-needed funds to be channeled into emerging low-carbon technologies, supporting instead of penalising employers.
:: Kevin Rowan is regional secretary of the Northern TUC