Chemicals boss fumes over inexperienced taxes ‘that destroy industrial base’
Britain is going green by destroying its industrial base with tax and regulation, a leading industry boss has warned.
Steve Elliott, head of the Chemical Industries Association, accused ministers of ‘decarbonisation through deindustrialisation’ as the sector’s output fell 60 per cent and 26 sites closed in five years with the loss of 8,000 jobs.
He said the contraction meant Britain had lost its ability to produce key chemicals for clean energy, defence, advanced manufacturing and life sciences.
Some chemicals needed for clean energy projects such as solar farms and carbon capture and storage – championed by Energy Secretary Ed Miliband – have recently stopped being made in Britain as the industry shrinks.
Elliott said the chemical industry’s emissions had been cut by 60 per cent but added: ‘It’s because they are shutting sites. Some is due to world events but a lot is to do with hostile Government policy. Unless and until the Government tackles the part of things it can address, we’ll see more job losses to come.’
Britain’s 200 largest chemical firms – producing vital compounds for other manufacturers – employ 140,000 staff. It is more than four times the size of the beleaguered steel industry, which is receiving £2.5 billion of Government support during the current parliament.
Lifeline: The Government agreed a £120milllion loan for a plant at Grangemouth
Chemical firms are mostly based in clusters around Southampton, South Wales, the North West, Hull, Teesside and Grangemouth, Scotland – some are deprived areas with few other highly-skilled jobs.
As in other sectors, the main issue is high energy costs due to high fixed prices and green levies.=
‘Our gas is four times more than in America and we have the highest industrial electricity prices of anywhere in Europe,’ Elliott said.
The industry predicts a 79 per cent surge in energy costs over the next year due to the Iran war.
Ten chemicals needed for items from toothpaste to solar panels have ceased production in the UK since 2020 and must now be imported, the association revealed.
Britain only retained its capacity to make ethylene, used in plastic production and life sciences, after the Government agreed a £120 million loan for a chemical plant at Grangemouth in December.
A potential shortage of imported carbon dioxide due to the Iran war forced ministers last month to spend £100 million reopening a mothballed Teesside bioethanol plant that makes the gas – used in food and drink – as a byproduct.
Last month, Elliott wrote to Keir Starmer calling for ‘action to arrest the decline’ of a ‘key industry’. The Department for Business said it would ‘continue to engage’ with industry to assess green levies including carbon tariffs. Industry Minister Chris McDonald said: ‘We know this is a tough time for our chemicals industry, grappling with increased fossil fuel prices.
‘We’re cutting electricity prices through our Industrial Strategy.’
