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COMMENT & ANALYSIS


EDITORIAL Editor Mark Simms BSc


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Is government policy hurting UK manufacturing?


takes to ensure UK manufacturing grows and thrives. What better insurance for a secure future could there be? And yet, time and again, measure after government measure seems designed to hobble the very industries that could be putting us back on our feet. Let’s take, for example, the flagship policies addressing climate change, which effectively


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translate into a significantly increased tax burden for the most energy intensive industries. A report has suggested that some of the UK’s key manufacturing sectors are being put at a significant competitive disadvantage because energy and climate change policy is making electricity more expensive. The cost of energy taxes for energy intensive industries in the UK is significantly higher than elsewhere. Ironically, some of the hardest hit industries include manufacturers making cement, industrial gases and chloro-alkali – ironic because these are the very products that form the building blocks for energy efficient products such as solar panels, as well as high value products in electronics and fibre otpics, areas where the government insists we could be strong enough to lead the world. How are we going to lead anyone anywhere when it costs so much more to make these products here than in other countries. It’s a similar picture in steel making. Steel makers in major


competing countries such as Germany, Russia, India, the USA and China pay considerably less for their electricity than steel makers in the UK. At the extreme, EEF reckons that by 2020 UK steel makers can expect to pay over 280% more for the impact of government policies on electricity prices than American and Russian competitors. Different countries pursuing different carbon reduction policies at different rates and costs –


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Industrial Technology


even within the EU – is putting British industry at a major disadvantage. Is it any surprise, then, that Thamesteel became the latest casualty in the UK steel industry, closing its doors in Sheerness with the loss of almost 400 jobs. Then there came news that Vestas had changed its mind on the building of a wind turbine manufacturing plant in Sheerness which would have created around 1,600 jobs. No one has mentioned the link, but I wonder how much of an incentive it was for Vestas to have had a steel plant on its doorstep? Perhaps the reasons Vestas gave were even more damning, with the Danish giant saying it hadn’t secured enough orders to go ahead. Orders can’t have been helped by reports that Chancellor George Osborne wanted to cut subsidies for onshore wind farms by 25%, despite warnings that that level of reduction would effective kill the development of wind power sites. Nobody, it seems, is winning in our moves to a green economy. Industry is paying more,


and suffering hugely. There is no government support for the industries that are suffering the most. But at the same time, there is a lack of investor confidence in the green policies that actually exist. Does that sound like the policies of a government committed to manufacturing?


Mark Simms Editor


ou would hope that the answer to the question above would be an unequivocal ‘no’. You would anticipate that, with all the talk of rebalancing the economy, with the potential crisis of a double dip recession, and with all the problems hoisted upon us by the banking industry, that government would be falling over itself to do whatever it


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Industrial Technology ISSN 0967-5787


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