Britain’s switch to green energy will spark a jobs catastrophe if it is built on imports from China, one of Labour’s biggest union backers has warned.
Gary Smith, the general secretary of the GMB union, said the UK’s progress in cutting carbon emissions so far was largely based on the “decimation” of manufacturing industries such as steelmaking, creating “huge social and economic scars”.
He accused successive governments of failing to deliver tens of thousands of jobs that were promised from the expansion of wind and solar. He argued that goods needed to support new green industries should not be purchased cheaply from China.
In a stark wake-up call for Labour, Mr Smith also warned that Ed Miliband, the Energy Secretary, risked making the situation worse with a crackdown on North Sea oil and his plans to decarbonise UK power by 2030.
His comments come just weeks after massive job losses were confirmed at the Port Talbot steelworks in South Wales, where owner Tata Steel is transitioning from ageing blast furnaces to cleaner electric arc furnaces.
Mr Smith, who has led the GMB since 2021, said: “Climate change is a huge problem, we accept that. But the UK has essentially reduced its carbon emissions by putting people out of manufacturing jobs and moving the work to countries like China.
“Our renewables infrastructure is being built in state-owned or oil and gas wealth fund-backed yards in China and the Middle East, and China obviously burns a huge amount of coal to produce the steel required for that.
“It is not morally defensible. And so for British politicians to go around the world talking about climate change and the threat it poses, well – we’ve simply embarked on a policy of exporting jobs and importing virtue.
“So I doubt many people in other advanced economies think that approach to decarbonisation has been a sensible one. It has hollowed out our communities, it’s decimated our industrial base and it’s left huge social and economic scars across the UK.”
China as a ‘huge, non-market actor’
Labour ministers are grappling with concerns that the rush towards green energy risks unintentionally damaging British industry.
Since 1990, manufacturing’s share of the economy – which is dominated by services – has decreased from 17pc to 9pc, according to research by the House of Commons library.
And there are fears that the decline could continue. Many companies already complain that UK electricity prices are much higher than in Europe and the US, and they face being clobbered by higher carbon taxes and green levies on power.
This is a particular problem for businesses that rely on gas for most of their energy, as they will soon have to shift to electricity which is far more expensive. In 2019, the cost of industrial electricity was roughly six times that of gas, according to government data, with almost half of the total made up of network charges and taxes.
Jonathan Reynolds, the Business Secretary, has repeatedly insisted that “decarbonisation must never mean de-industrialisation”.
But in an interview with The Telegraph, Mr Smith said Labour’s own policies risked accelerating industrial decline.
“This Labour Government has inherited an absolute hospital pass from the Tories, [when] a lot of difficult decisions were kicked down the line,” he said.
“But the problem is Labour’s policy positions are in danger of compounding what is already a very problematic position – they’re going to make things worse if they’re not careful.”
He added: “We’ve got this world view that’s all about clean electricity and the charge towards that. But the truth is, it’s not going to happen in the way that people think it is.
“In areas like wind power, we have been promised tens of thousands of jobs repeatedly by successive governments. Now we hear the same from the Labour Government.
“But these jobs have never materialised because it’s simply a lot cheaper for people to produce the infrastructure in places like China.”
Chinese wind turbine manufacturers still account for a relatively small slice of the European market, which remains dominated by giants such as Denmark’s Vestas and Germany’s Enercon, Nordex and Siemens Gamesa – the latter of which has a factory in Hull.
But amid booming production at home – supported by state aid from Beijing – Chinese companies are seeking to win more projects abroad with ultra-cheap prices. Zhongshan-based Mingyang Smart Energy Group is among the suppliers chosen for a host of wind projects in the North Sea, recently pledging to open a factory in Scotland.
Meanwhile, wind farm developers have privately argued that to hit the Government’s 2030 clean power target, ministers may have to relax – rather than strengthen – rules designed to ensure that turbines are made with “local content” from the UK.
Mr Smith said the GMB did not support tackling Chinese exports through “protectionist” measures such as trade tariffs, such as those applied by Joe Biden, the US president.
But he called for the Government to introduce a carbon border tax which would penalise imports of steel or other products shipped from China that had been produced using carbon-intensive processes.
Mr Smith warned: “Protectionism is not in the interest of workers or our economy. We’re a trading nation. But this is not fair trade and we need to stop pretending it is.
“There is just a fundamental challenge with not having a level playing field and competing against a huge, non-market actor like China.
“There needs to be a debate over a carbon border tax and as a new world order starts to take shape, there has to be a debate about the national security implications of having no industrial base.”
North Sea jobs at risk
As a union representing large numbers of oil and gas workers – once known as the General, Municipal, Boilermakers and Allied Trade Union – the GMB is also concerned about Mr Miliband’s stance regarding the North Sea.
Since Labour’s election victory in the summer, the Energy Secretary has initiated a review of the licensing process for North Sea oil and gas projects and withdrawn opposition to legal challenges that target fossil fuel projects such as Equinor’s Rosebank.
Meanwhile, Rachel Reeves, the Chancellor, has piled on further pressure by expanding the scope of a windfall tax on the sector. That has prompted warnings from North Sea operators that a string of projects will have to be wound down prematurely.
Mr Smith warned that the green transition was being forced on the industry too quickly and risked triggering a jobs bloodbath if ministers did not pull back.
“Successive governments have taken a hostile position and a fundamentally dishonest position on the realities of oil and gas,” he said.
“We are going to need oil and gas for decades to come. And actually, Labour agrees with that. It’s in their manifesto – we ensured it was in there.
“But what is totally counterproductive from a Labour perspective is taxing the industry out of business and putting bans on new exploration. You’re going to create a cliff edge which will have devastating implications.
“If you close down oil and gas prematurely, where are people going? So much of the supply chain for these industries is actually in the North East, on the Tyne.
“I have said to Labour, ‘You can close down an oil rig 100 miles offshore and nobody sees the consequence of that. But what about the first factory in the North East that has to lay people off?’ That’s when they will have a very big political problem.”
The GMB’s fears about jobs were acknowledged on Monday by Mr Miliband, who used his speech at the Labour conference to stress that the Government cares “about what we make, where things are made and who makes them”.
“I promise you this: I will use every lever we have to win jobs and build new industries for Britain,” the Energy Secretary said.
“Let’s spell out what this future means. Jobs building carbon capture and storage. Jobs manufacturing electrolysers for hydrogen. Jobs constructing the next generation of nuclear power stations. Jobs manufacturing for floating wind, using the skills of our North Sea workers and to decarbonise our country.
“A plan to re-industrialise our country. That’s the difference a Labour Government makes.”
With just over five years to go to hit Mr Miliband’s clean power target, time is short to prove that the green revolution can be a boon for British industry after all.
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