If any two commodities were central to the industrial revolution, they were coal and steel. Britain pioneered the mass production of both, launching a worldwide transformation that multiplied living standards many times over. And now, ironically, it looks as if, in an almost Maoist pursuit of global leadership in achieving Net Zero, we will be the first major developed country to close them both down. There is just one catch. In reality, that is economic suicide - and time is running out to do anything about it.
It has, in fairness, a certain symbolic symmetry to it, although even Sally Rooney’s editor might turn it down as being a little too cheesy. The UK is now leading the world in shutting the industries that it pioneered, and which powered the modern world. On Monday, we closed the last remaining coal power station, at Ratcliffe-on-Soar, ending 142 years of using the fossil fuel for energy: the world’s first coal-fired power station, in Holborn Viaduct, was built in 1882 by none other than Thomas Edison to bring light to the streets of the capital.
On the same day, steel workers wound up the traditional manufacturing of the metal in Port Talbot, in Wales, bringing an end to an industry that, from its origins in the 1850s, once led the world. There are many different milestones that future historians may choose when they look back on the strange story of Britain’s deindustrialisation. But October 2024 will certainly be one of them.
The trouble is, that will be hugely destructive. Both industries have been sacrificed on the altar of Net Zero. Coal-fired power plants don’t fit in with targets to have the grid running a hundred per cent on renewable energy by the end of this decade, while the Government has decided that Port Talbot should focus on ‘green steel’ even though it means losing thousands of jobs, and valuable skills. And yet, there are four big problems with that.
First, we are moving far faster than other countries. Even Germany, with the Greens part of the coalition government, isn’t completely closing coal power generation (in fact, it has been increasing it), and neither has any other major country. They quite rightly recognise that you can’t switch off one source of power without making sure they had something to replace it with. By contrast, we are recklessly gambling that renewables will come on stream to save us.
Next, we are crippling our industries. We already have some of the most expensive power in the world, with industrial electricity prices now 74 per cent higher than in the US, and 34 per cent higher than in France. The gap is widening all the time, but instead of trying to fix it, we are making it worse.
Thirdly, we are closing industries that are critical both to self-dependence, and on which every form of construction and manufacturing depends. There is a reason why every developing country’s plan for industrialisation involves a steel plant. It is critical to everything else. Without steel, a modern economy doesn’t function.
Finally, all we are really doing is offshoring carbon emissions. We will import energy and steel from countries that are still living in the real world, but sacrificing jobs and tax revenues in the process.
There is nothing wrong with targeting a Net Zero economy, although it is questionable whether the UK, which accounts for less than 1 per cent of global emissions, genuinely needs to be a world leader. But it is crazy to destroy our industrial base in the process, or to cripple the few remaining companies we have that are still able to compete on global markets. Our new Labour government is doubling down on a strategy it inherited from the Conservatives that was already woefully unrealistic. Our already fragile economy will be the victim of that - and it will be dealt a blow from which it will be hard to ever recover.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
