Here is the news from the Green Ministry of Propaganda: the threatened closure of Britain’s largest steel works in Port Talbot, Wales has almost nothing to do with the inflated costs of green energy.
Apparently it’s all just a myth put out by nasty right-wing columnists. Or so crows the Guardian, quoting EU-funded eco-propaganda site the Carbon Brief, claiming that the cost of green levies amounts to no more than one per cent of Port Talbot’s production costs. Labour’s shadow chancellor John McDonnell agrees with this assessment. So that makes it all OK then, right?
Well, no. As we learn from Paul Homewood these “nothing to do with us, guv” claims are a downright lie.
In December last year the House of Commons Select Committee for Business, Innovation & Skills produced a report on the UK steel industry.
According to the industry, the price of electricity in the UK for extra large users is the highest in the EU by some margin. Figure 6 indicates that prices for these industrial consumers have risen steadily in the UK since the start of this century and were the highest in the EU in 2014.
Other studies have confirmed that electricity costs are relatively high in the UK for industrial users. Whilst energy costs may not represent a high proportion of total costs, we were told that they nonetheless represented a “significant proportion” and that “the margins are very small, so any disadvantage is magnified”.
Some of these relatively high costs can be attributed to policies designed to combat climate change. The Government estimates that climate change policies have added 18% to electricity prices for the steel industry, falling to 14% after compensatory measures are implemented.
According to the government’s own figures, climate policies are already adding 26 per cent to the cost of the electricity used by heavy industry. By 2020, the added cost caused by climate levies will rise to 59 per cent.
Tata, the Indian owner of the Port Talbot steel works, currently spends £250 million on energy for its European operations. So at UK rates, around £50 million of that cost consists of green levies. By 2020 this is set to rise to well over £100 million. In deciding to sell off its UK operations, then, Tata is thinking not just of the already inflated current energy costs but of the fact that the situation is going to get worse not better. Of course it’s going to move its steel production (“offshoring”) to wherever energy costs are cheaper: there would be no business sense in doing otherwise.
So yes, Chinese steel dumping may have played its part in the British steel industry’s demise. But so too, unquestionably, have all the environmental levies imposed by Labour’s Ed Miliband in his stint as Secretary of State for Energy and Climate Change and subsequently endorsed by David Cameron in his bid to lead the “greenest government ever.”
And it’s not just steel that has been affected, as Matt Ridley notes:
Before Redcar and Port Talbot, remember Lynemouth, where Britain’s last large aluminium smelter closed in 2012. In aluminium, as in steel, China is now by far the largest producer, smelting five times as much as any other continent, let alone country. The chief reason aluminium left (though a small plant survives at Lochaber) was the sky-high electricity prices paid in Britain: electrolysis is how you make aluminium. For extra-large industrial users, British electricity prices are the highest in Europe, twice the average, and far higher than in Asia and America.
Ridley goes on to quote a particularly noisome piece of dishonesty from the loathsome Lord Deben, the green activist who chairs the government’s Committee on Climate Change and claims that Britain’s climate legislation is the “envy of the world.” Even more implausibly, Deben insists that there is “no evidence at all of offshoring due to climate policy” .
But as always with these stories, you can so easily get bogged down in the details that you lose sight of the big picture. For me, the two most important take-home messages from this ugly affair are as follows.
First, the green movement is ideologically opposed to Western industrial civilisation: so these factory closures are not a regrettable by-product but the very deliberate aim of its policies.
Second, just like the Social Justice Warriors, and just like the Islamists, the environmental movement has absolutely no problem with telling outright lies in the service of its cause. If you deliberately drive up energy prices by replacing cheap fossil fuels with expensive renewables costing three or more times than standard rate, then of course you are going to drive up the cost of living and of course you are going to penalise especially heavy industry users. Only someone with absolutely zero respect for the truth would have the gall even to pretend to argue otherwise.
Still, you can quite understand why at times like these the greens tone down their strident anti-capitalism. If ever the workers of the world got truly to appreciate just how much damage the environmentalists are doing to their livelihoods and job prospects, then the green movement would come to a very sudden and messy end.