Industrial closures from green policies

 

             The nation is gripped by a debate about the cost of keeping our homes warm this winter. There is another important matter to raise – the impact high energy prices has on our industries.

                Industry transforms raw materials into valuable products. To do so it uses a lot of heat. Gas is also an important feedstock for the chemical industry. Activities like petrochemicals, steel making, ceramics manufacture, general chemicals, glass production and cement require large quantities of energy and gas.

                 At the centre of the Grangemouth closure is a loss making petrochemicals plant which has been losing £10m a month. The dispute with the Union is the immediate cause of the possible  closure. The Union was unwilling to accept a rescue plan  based on maintained salary levels with a less generous pension deal.  The underlying reality is dear energy and dear gas feedstock making it difficult to run a profitable business. Meanwhile US competitors buy gas at much lower prices. It is good that the Union is thinking again about their refusal to accept the recovery plan. The management tell us  that the average wage at Grangemouth is twice the Scottish average. The recovery plan requires substantial expenditure on new facilities to import US gas.

                           One of our leading steel makers has warned the EU that European carbon targets and related costs are pushing more steel making to other continents.  BASF have just announced the closure of their Paisley chemical plant, owing to high energy prices and other costs.

                         Tata Chemicals closed its soda ash factory at Northwich owing to high gas prices.

                          The EU summit has been discussing the need to remove unhelpful EU regulations that are damaging business and destroying jobs. Dear energy is one of the worst features of an EU regime that is giving a big competitive advantage to Asian and Amercian industrial competitors.

                                 If the Uk wants to rebuild its industrial base, it has to extract a lot more of the gas under our feet as quickly as possible. It also needs to use cheaper forms of electricity generation than wind farms. It is not just the high energy using businesses at risk. Modern assembly plants have very large power bills as they have automated extensively.  Power can often cost more than wages in a modern factory.

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102 Comments

  1. Posted October 25, 2013 at 5:30 am | Permalink

    Spot again, but if you listened to BBCQT last night do you think you can do anything in this Parliament with the Lib Dems and others set against it.
    If you wait until after the Election I will be surprised if you get an overall majority unless DC harden up his EU negotiations and tell us voters what we can expect and when.
    In my opinion I still believe he should invoke article 50 which forces a renegotiation on the EU within a timetable!

    • Posted October 25, 2013 at 7:19 am | Permalink

      Indeed the only voice of reason on QT last night was Peter Hitchins (at least there was one this week usually there are none). The rest were all the same they could have been in the same party, or church perhaps I should say on the green energy issue.

      • Posted October 25, 2013 at 10:23 am | Permalink

        Peter Hitchen’s exhortation to young people to emigrate “…while you still can.” was sound advice. Nothing but high tax, oppression and poverty for their future.

        Caroline Flint’s “The best of Britain is yet to be seen.” was insane and ill informed and yet we have been so conditioned as not to notice how ridiculous it really was to say it.

        • Posted October 25, 2013 at 4:34 pm | Permalink

          It was reported today DECC/ministers involved in cover up over a map showing how much land each energy source would require. Wind machines, on and offshore, uses huge amounts for very little in return. It was viewed as sensitive and not printed. It appears Cameron wants to cut green levies on energy bills and pass on to taxation, how about stopping the stupid wind machines full stop.

          • Posted October 27, 2013 at 10:47 am | Permalink

            How about stopping the stupid wind machines full stop?

            Indeed just stop all the subsidies and and wind is simply dead, no one wants to pay 3 times the going rate for intermittent electricity that is only worth perhaps half of what on demand energy is. Except of course Cameron, Davey and the Coalition but using other peoples money that is.

      • Posted October 25, 2013 at 12:02 pm | Permalink

        I agree, but I wish Hitchens would be a bit more upbeat as a personality and to kill with facts rather than exasperation.
        For example when Caroline Flint was talking about Germany and its ‘terrific development of wind and solar power’, nobody said yes, but Germany has the highest energy costs in Europe.

        Our politicians really do have to face people with the facts. More green = more cost and bigger energy bills.
        Labour are at their disingenuous worst pretending a shake down of the energy companies will solve ‘the problem’. It won’t; it can’t; green = more expensive, end of.

        Repeal the nonsense Climate Change Act before it’s too late.

        • Posted October 25, 2013 at 4:20 pm | Permalink

          Germany has the highest energy costs in Europe.

          So Germany has the highest energy costs in Europe but is a major manufacturing nation. Doesn’t that imply that high energy doesn’t harm manufacturing?

          • Posted October 26, 2013 at 8:46 am | Permalink

            Oh for crying out loud Uanime5

            If you are going to keep citing Germany as a model to follow please at least find out something about it. No wonder you’re unemployed you just refuse to learn anything.

            Germany has major tax advantages ( ie what you would call evil tax avoidance) for manufacturing companies.

            Plus you do know that most of the major big German manufacturers don’t make their products in Germany they are made in factories in Eastern Europe, Asia and South America.

        • Posted October 25, 2013 at 5:38 pm | Permalink

          I agree with you con.
          But I notice Hitchens is one of the BBC’s default choices to fill the right wing seat on the QT panel along with Littlejohn and Starkey.
          They then put a reasonable but naïve Tory politician on the panel and the trap is set to make all left wing views look good and mainstream.
          The Conservative person gets tarred with the same brush or as a bonus the right wing guest attacks the Conservative politician as well.
          All you need is an audience of mainly left leaning souls to cheer boo and clap in the right places and the set up is complete.

          • Posted October 26, 2013 at 9:59 pm | Permalink

            I agree with this. I just watched it on record though I normally miss QT as I find it too banal with the audience participation. There’s no real debate. Peter Hitchens – who I thought was rather absurd on a couple of issues – made a clear point on global warming theory driving energy prices but none of the others challenged him. There was no real debate, just attempts from the others at a few audience pleasing platitudes. As ever the BBC had a leftist audience. I suspect the NUT was strongly represented.

            As you say, the viewer is encouraged to believe the left view is mainstream.

          • Posted October 27, 2013 at 10:56 am | Permalink

            Indeed and they are usually quite right to attack the Conservative politicians as the are usually defending the same lunacies a Labour and Libdems. On the undemocratic EU, green energy, HS2, pointless wars, loans to the PIGIS, high tax borrow and waste, a dis-functional NHS, a state funded BBC propaganda unit and the rest.

    • Posted October 25, 2013 at 8:24 am | Permalink

      Well, I don’t believe Cameron would ever want to invoke Article 50, and at present he has the cover that it’s a coalition government and leaving the EU is not part of official government policy as agreed between the coalition partners.

      It’s mildly interesting to speculate what would happen if Hague had some kind of fit, and suddenly off his own bat he ordered his officials to prepare and send the required notification that the UK intended to withdraw under Article 50.

      Almost certainly they would refuse to do that, on the grounds that it was not official government policy; but if he somehow forced them to do it then the other EU governments on the European Council would probably refuse to accept the notification on the same grounds.

      Reply Mr Hague would never do that.

      • Posted October 25, 2013 at 1:17 pm | Permalink

        Reply to reply

        We know !

      • Posted October 26, 2013 at 8:34 am | Permalink

        JR: “Mr Hague would never do that.”

        When I read that, you could have knocked me down with a feather!

        • Posted October 27, 2013 at 10:07 am | Permalink

          JR: “Mr Hague would never do that.”

          But of course Hague, nicely illustrates why you cannot trust a Tory. He built his career as a patriotic Eurosceptic. Yet no sooner has he been given the red box, he starts backtracking and lying.

          Labour supporters have one thing right, you can’t trust a Tory.

  2. Posted October 25, 2013 at 5:38 am | Permalink

    Nothing could better illustrate the failure of the establishment to understand the outside world. Yesterday, McCluskey and Salmond huffed and puffed that they will not “allow” Grangemouth to close. Neither man is “fit for purpose”. The issues are much bigger and much much more serious than the concerns of these people or the seriously affronted Liberals.

    Simple fellows like me wonder when we will get fracking here and give Grangemouth something to work on. In the meantime, once the plants at Paisley and Northwich are gone, it is near impossible that they will return. Well done, the establishment!

    • Posted October 25, 2013 at 12:40 pm | Permalink

      Yes, it shows how out of their depth Salmond and McLuskey are. One can sense the panic as they realise that they will, in fact, take a good deal of responsibility for this fiasco whether they like it or not, and be remembered for it.

  3. Posted October 25, 2013 at 5:38 am | Permalink

    Big industry [ceramics, steel production] needs big power, ask the German industrial giants what they think of ‘renewable energy’ – it is useless for heavy industry [and most things else besides]. Base load – ie -steady state power supply is needed.
    Close our coal fired plant here in the UK and we close down what remains – the scant vestige of the British industrial base.
    Stuff nuclear – Hinkley if it ever does will not come on stream until circa – 2030. We must keep the lights on NOW and absolutely keep the remaining coal generating power supply plants open. Thus we MUST ignore the LCPD and then build new coal generating plant – just like the Germans are.

    Simple, like in most things helpful to the UK – we must tell the EU to ‘do one’.

    • Posted October 25, 2013 at 8:17 am | Permalink

      Do we have to ask the EU to let us lower our own unique carbon tax and then build coal power stations like the Germans? Or could Dave just ask Dummy?

    • Posted October 25, 2013 at 10:14 am | Permalink

      The problem is the UK Establishment have a “Yes Minister” culture so whatever barmy directive that comes out of the EU we meekly comply with.

      Our political class and their civil servants need to man up and act in the interests of the UK, not some unelected supranational socialist construct which has been imposed on us by stealth.

      If some law or reg they require does not suit us or is likely to damage jobs and industry then we need to ignore it simple as – do a thorough impact statement on everything they dream up before implementing and give it full and proper parliamentary scrutiny with HOC votes rather than some small committee having a half hour chat before waving it through – we know about the Lib/Lab/Con cosy relationship of letting things through parliament if its from the EU – this has got to stop.

      You can argue the legality of going against EU regs – I would argue that the construct which thinks its a national government in my mind has no legitimacy whatsoever – its a cesspit filled with parasites that we need to extract ourselves from ASAP.

    • Posted October 25, 2013 at 4:23 pm | Permalink

      We can keep our coal power plants operational as the LCPD allows this, provided that they’re upgraded to meet EU laws on sulphur dioxide and nitrogen oxides.

      • Posted October 26, 2013 at 9:23 am | Permalink

        That is true – we could convert existing coal plants to be compatible with LCPD .

        It would however be a heck of a lot better to build more efficient new coal powerstation’s like Germany has done .

        However the UK 2008 Climate Change Act requires all new generation produce less than 380g CO2 / kWh which is half what and Germany’s modern coal plants produce (770g CO2/kWh ) .

        It’s the UK’s Climate Change act which prevents new coal , not the EU .

        Why doesn’t John’s Government scrap it ?

        • Posted October 27, 2013 at 3:20 pm | Permalink

          We’ve saddled ourselves with new coal build having to have provision for Carbon Capture and Storage.

          Now CCS hasn’t been demonstrated to work even as a pilot scheme. It’s a pipedream and necessarily hideously expensive, hugely increasing the amount of coal burned

  4. Posted October 25, 2013 at 5:38 am | Permalink

    As you say:- “If the UK wants to rebuild its industrial base, it has to extract a lot more of the gas under our feet as quickly as possible. It also needs to use cheaper forms of generation than wind farms.”

    Yet Cameron and Davey still pay huge amounts of tax payers money in subsidies for pointless wind and PV! Not to mention PV, electric cars and now even electric Boris bikes it seems.

    Well done to Andrew Neil (and the BBC, for once employing some one sensible) for his destruction of The Hon. Sir Jonathon Espie Porritt, 2nd Baronet, CBE on The Week last night over Germany’s coal and French nuclear and fake “green” expensive energy policy. Why on earth has Porritt (who has been proven wrong on almost everything he has ever uttered over 30 years) been given so many honours and positions? He if even more wrong on everything than John Major has proved.

    It is hard to believe that Cameron and even Clegg, Davey and even Porritt & Huhne are so stupid as not to understand what is needed (as you point out above). So what is the explanation for their insane policies and uttering? Either they are very, very stupid and are not taking any sensible engineering advice or they know what is needed, but for some other political, financial or religious reason are simply not doing it or saying it.

    Anyone who utters the phrase “new green jobs” is almost certainly a charlatan – every green job destroys perhaps 10 perhaps with the assistance on Miliband’s beloved Unison.

    Just stop the tax payer subsides and carbon taxes now.

    • Posted October 25, 2013 at 5:47 am | Permalink

      Perhaps we need a counter display of the number of hyperthermia deaths caused by the expensive green energy and AGW religion this winter somewhere in Westminster. Perhaps in one of their hugely subsidised (and over heated) HOC bars or restaurants.

      • Posted October 25, 2013 at 8:24 am | Permalink

        News this morning that a health quango is advising us to turn down the heating but keep living areas at 21C and bedrooms at 18C. The standard used to be 18C for living rooms. Many older people keep their heating at lower temperatures. Perhaps someone should ask whether this quango is doing anything useful.

        • Posted October 25, 2013 at 8:45 am | Permalink

          Stred

          How can anyone tell others what temperature they should be comfortable in.

          My good wife and I can never agree on that, either its too hot for me, or too cold for her.

          Amazing, I thought you just turned up the heating until you were comfortable, then turned it off or down.
          I would guess few have a themometer in each room anyway !!!!

          Another Quango wasting money, who dreams up these dictats.

    • Posted October 25, 2013 at 7:35 am | Permalink

      Not much to say on nuclear lately have we. I Wonder why? Is it because of absurd cost and subsidies to large foreign companies? As for fracking in Britain there could be some significant technical difficulties and the amount of equipment required in built up areas. Of course anyone who is against wind farms will be waving to the lorry drivers won’t they?

      • Posted October 25, 2013 at 8:34 am | Permalink

        Yep too right I will.

      • Posted October 25, 2013 at 9:41 am | Permalink

        What on earth does this mean Baz…”anyone who is against wind farms will be waving to the lorry drivers won’t they?”
        Is this some new EU directive I need to comply with?

        • Posted October 25, 2013 at 4:24 pm | Permalink

          It implies that people who are opposed to wind farms are also likely to be opposed to all the lorry drivers (and lorries) needed to build wells for fracking.

          • Posted October 26, 2013 at 8:53 am | Permalink

            So do you use Merlin and his magic levitation skills to get you wind turbines to site, and all the equipment to generate and distribute. Or as I suspect do you use lorries too. What an idiot post Uanime5.

            As a socialist you seem to be in favour of shutting down lots of major industries and shedding 1,000’s of workers jobs. How interesting. I see this as Labour party policy. The more people such as yourself who don’t bother to work or contribute anything to society the more control they have. Sad

          • Posted October 26, 2013 at 9:01 am | Permalink

            Will they also be waving at all the lorries moving wind farm turbine parts and PV panels around the country Uni, or is this all OK?
            Pathetic loony left gesture politics with no logic as usual.

          • Posted October 27, 2013 at 5:40 pm | Permalink

            Dirty expensive process needing a large number of lorries massive quantities of water and chemicals. As you all think it will be like America then you need to watch a documentary called ‘Gasland’ to see some of the drawbacks to your fantasy

          • Posted October 27, 2013 at 11:43 pm | Permalink

            So Baz,
            Lorries that move items for fracking are all bad.
            Lorries that move items for wind farms or solar panals are all good.
            Just so very random.
            Fracking is not “dirty”
            And fracking maybe”expensive” but that’s not our concern.
            If someone feels it will make a profit that’s their decision.

            PS The gasland propaganda film has already been discredited.
            Haven’t you heard yet

      • Posted October 25, 2013 at 8:08 pm | Permalink

        My Dear Bazman

        Please go away, google wind farm subsidies, find out how much is spent and sit in stunned silence as you learn that nearly ALL the companies getting UK taxpayer subsidies for installing wind power are foreign companies.

        You haven’t got a clue about tracking.

        I also suggest that when you are waving to the lorry drivers you do it from the side of the road rather than standing in their path as you seem to do .

        • Posted October 25, 2013 at 8:09 pm | Permalink

          FRACKING not tracking damn auto correct

          • Posted October 26, 2013 at 9:29 am | Permalink

            Libertarian ,

            It’s not “FRACKING” either .

            It’s “frac’ing” .

            There is no “k” in fracturing unless one chooses to follow convention of using the “k” token for permeability in formulae .

        • Posted October 26, 2013 at 9:30 am | Permalink

          How many of the big six are foreign state owned companies receiving massive subsidies and in some cases propping up share prices instead of investing in infrastructure? One of the nuclear investors is Chinese government owned leading to a lot of complicated questions. Ram it.

    • Posted October 25, 2013 at 9:06 pm | Permalink

      There is often advantage in being consistently wrong. The intelligent know to do precisely the opposite. I recall this being the grounds for employing a particularly hapless forex trader at a major bank – he could be relied on to call the market wrongly more often that the bank’s sharpest analysts called it right.

  5. Posted October 25, 2013 at 6:04 am | Permalink

    Could we just get it clear that the UK government agrees with the EU that energy prices should be high?

    This is not unplanned, it is deliberate policy to make energy expensive so that less is used and less carbon dioxide is emitted into the atmosphere.

    That is why the last Conservative government decided to apply VAT on fuel and power, first on non-domestic supplies at the standard rate and then on domestic supplies at a lower rate to be later raised to the standard rate.

    As explained in the 1997 House of Commons Library Briefing Paper here:

    http://www.ukbriefingpapers.co.uk/briefingpaper/RP97-87

    Even when the Labour government cut the VAT rate on domestic supplies from 8% to 5%, the minimum permitted by the EU, there were concerns about whether that would make it more difficult for the UK to meet its target for reducing carbon dioxide emissions.

    And also from that briefing:

    “At an earlier point in his speech Mr Lamont proposed a second measure to help the UK cut CO2 emissions: a commitment to increase road fuel duties by at least 3% a year in real terms. This target was increased to 5% a year by Mr Lamont’s successor, Kenneth Clarke, in his November 1993 Budget, and to 6% a year by the present Chancellor, Gordon Brown, in his July 1997 Budget.”

    It’s all to do with saving the planet, ostensibly; and for people of that mentality if it means shutting down swathes of the UK economy, throwing workers here on the scrap heap and having blackouts and running up both trade deficits and government budget deficits, then so be it; because that is seen as a sacrifice worth making, even though it is clearly a futile sacrifice when most of the carbon dioxide emissions are simply transferred to other parts of the world.

    • Posted October 25, 2013 at 7:36 am | Permalink

      Many European countries have lower energy prices despite higher taxes so square that one of in your fantasy world.

      • Posted October 25, 2013 at 7:55 am | Permalink

        Please name these many EU nations with cheap energy and high taxes compared to the UK Baz, or admit you just made this up.

        • Posted October 25, 2013 at 9:02 am | Permalink

          Obvious example is France – significantly lower domestic energy price and significantly higher taxes. Finland too I think. Otherwise UK domestic energy is relatively cheap in European terms, much lower than Germany, Denmark, Italy, Sweden.

          • Posted October 25, 2013 at 4:38 pm | Permalink

            Thanks Roy, so there are 2 out of the 27 or so European countries that match Baz’s claim
            Not quite “many” as stated though.

            Glad to see France’s nuclear power is giving their citizens cheap energy.

          • Posted October 25, 2013 at 7:46 pm | Permalink

            Roy Grainger: “Obvious example is France – significantly lower domestic energy price … ”

            France went Nuclear in a BIG way, which might have an impact on their overall energy price.

      • Posted October 25, 2013 at 8:25 am | Permalink

        Do you mean my fantasy world as depicted in that briefing?

        • Posted October 25, 2013 at 3:45 pm | Permalink

          And yesterday evening it was reported that the UK government now wants to go even further with this insanity:

          http://uk.reuters.com/article/2013/10/24/uk-eu-britain-carbon-idUKBRE99N0NA20131024

          “Britain calls for EU to set tougher climate goal”

          “The European Union needs to cut greenhouse gas emissions by 50 percent from 1990 levels by 2030 to avoid the worst effects of climate change, according to a British government paper, likely to fuel debate on whether deeper cuts are affordable.”

          “The European Commission, the EU executive, is expected to unveil proposed 2030 green energy goals around the end of this year.

          “The EU needs to be prepared to offer an international greenhouse gas mitigation target of 50 percent reduction on 1990 emissions,” the British paper, seen by Reuters, says on the EU 2030 targets.

          No one from Britain’s Department of Energy and Climate Change was immediately available to comment.”

          “EU sources have said the Commission is looking at a 40 percent cut in domestic greenhouse gases versus 1990 levels by 2030. It could be supplemented by up to 10 percent more cuts achieved by buying CO2 credits on the international market.

          Britain itself has committed to deep emissions cuts to reach a goal of an 80 percent reduction by 2050.”

          • Posted October 26, 2013 at 3:24 pm | Permalink

            Comment on Cameron hypocrisy missed for moderation.

        • Posted October 26, 2013 at 9:40 am | Permalink

          Labour wanted domestic supplies to have VAT cut from 8% to 5 and the Tories wanted it to be increased to 17.5. They were defeated. What does that tell us about the Tory attitude to the average person?

          • Posted October 27, 2013 at 10:02 am | Permalink

            That Labour have no concerns about reducing a debt of over a trillion and an annual deficit of over one hundred billion.
            Prefering to play gesture politics for cheap popularity rather than face up to their endless overspending by borrowing more and more money.

          • Posted October 27, 2013 at 10:05 pm | Permalink

            LOL!

  6. Posted October 25, 2013 at 6:13 am | Permalink

    Yet again huge economic havoc caused entirely by government. The amazing thing is that people still start screaming for them to do something every time there’s some crisis when the result of their interference is more and larger problems. Maybe one day everybody will see that government is the problem not the solution.

    • Posted October 25, 2013 at 7:25 am | Permalink

      Mary realise government is the problem, but they are rather powerless to do much about it given the bias of the BBC they have to fund, the taxes used for endless propaganda, the EU, the political parties and the voting system (once every five years for the least worst candidate who has a chance on the whole basket of issues and who will probably rat once elected)

  7. Posted October 25, 2013 at 6:17 am | Permalink

    JR: “If the Uk wants to rebuild its industrial base, it has to extract a lot more of the gas under our feet as quickly as possible.”

    We need phracking, and we need it now. That would afford a breathing space while we build nuclear.

  8. Posted October 25, 2013 at 6:38 am | Permalink

    The LibDem Tim Farron was on TV last night, saying “global warming is a reality”.

    What he forgot to add was that even if global warming is a reality – and it’s still “if” as far as I’m concerned, in view of the evidence that temperature data have been manipulated, in fact falsified – the UK government’s longstanding policy of deliberately making energy expensive in the UK will have no perceptible effect on it.

    It will have increasingly damaging effects on the UK economy and on the lives of the UK population, but no perceptible effect on supposed global warming.

    • Posted October 25, 2013 at 6:54 pm | Permalink

      How exactly have the temperature readings throughout the world over the past 100 years been falsified?

      • Posted October 26, 2013 at 9:11 am | Permalink

        Uni
        Not heard of the e mail scandal nor the recent campaign to check temperature measuring sites are properly sited and that the equipment is properly calibrated.
        Since these two things have happened, completely coincidentally, global warming figures have slowed down to statistically insignifcant levels of low tenths of one degree global rise per decade.
        Odd that.

      • Posted October 26, 2013 at 10:00 am | Permalink

        uanime5: “How exactly … ”

        Before we deal with that, would you kindly provide the plot of CO2 atmospheric concentration between 1913 and 1958, please?

    • Posted October 26, 2013 at 3:30 pm | Permalink
  9. Posted October 25, 2013 at 6:56 am | Permalink

    The Grangemouth closure should be welcomed by the Minister for Climate Change, it shows his policies are working – price the traditional carbon-based industries out of UK completely – the Coryton oil refinery in London also closed fairly recently (but without the same press coverage). The fact that new replacement capacity is being built in the Middle East and Far East without the associated green penalties renders the closures entirely ineffective in reducing global CO2 emissions. It is a high price to pay merely for the UK to be able to take the political high ground on lecturing the world on decarbonisation. I suspect this is also the view of the traditional unionised working-class Labour voters, rather than their metropolitan elite leadership – another reason by UKIP may pose a threat to Labour in the North.

  10. Posted October 25, 2013 at 7:40 am | Permalink

    As discussed extensively here and elsewhere in recent days, energy costs, and the green policies which drive them are becoming a major issue for the election. Its a wide open goal for the Conservatives, albeit requiring a somewhat embarrassing volte-face by David Cameron. But he’s up to it. Let’s just say that Conservative policy is to ensure that consumers and industry in the UK will have access to energy at the best global market price, and the government won’t add to it. That means exploiting potential shale gas resources and getting rid of of all green taxes and subsidies. I think they will find it easier if, at the same time, they expose the global warming theory which underlies these policies to harsher scrutiny and debate.

    • Posted October 26, 2013 at 12:22 pm | Permalink

      Mr Head. Does profiteering by energy companies not exist in you capitalist dream world?

      • Posted October 26, 2013 at 9:11 pm | Permalink

        Usual left wing methods can be seen in this classic reply by Baz
        First open with personal abuse.
        Secondly ask a question in response.
        Thirdly avoid answering any arguments raised

        • Posted October 27, 2013 at 12:07 pm | Permalink

          There may be other factors in play to but like many apologists for big business refuses to recognise that profiteering is taking place. British gas is being accused by a whistle blower that it is making tens of millions from overestimated bills. Front page of the Observer today. Highly likely I’d say. I always make sure I owe energy companies money and so should everyone else. I see LED bulbs are becoming better and cheaper, so I will be making the change to them as soon as they become acceptable further lowering my £80 a month energy bill.

          • Posted October 27, 2013 at 11:49 pm | Permalink

            By “apologists” you mean anyone who dares to counter your views.
            Nice to see you taking advantage of the continual improvements brought about by the capitalist private sector.
            By your logic you would have expected energy saving green energy sources like LED bulbs would be restricted by wicked capitalists to exploit poor consumers and maximise their profits.
            Strange that never happened Baz.

          • Posted October 28, 2013 at 7:43 pm | Permalink

            Pay your own bills edward? There is a case for restricting florescent bulbs as they cost energy companies money by being ‘dirty’ They can ram it as fantastic as paperless banking lowering bank charges. LED’s last 25 years? As if…Never said it would be easy. Ram it.

  11. Posted October 25, 2013 at 7:48 am | Permalink

    Simple question John.

    What are all these so called green taxes spent on ?

    Do they go into the general taxation pot?

    Are they set aside for a particular purpose ?

    Reply These green levies on your power bill are spent on the green schemes and the dearer power. The balance goes into general spending.

    • Posted October 25, 2013 at 9:00 am | Permalink

      Reply-Reply

      Thank you

      I asked my electricity supplier to give me the breakdown of the elements they use in supplying power to me and all of their other customers.

      They supplied the following information.
      Coal 29%
      Natural gas 59%
      Nuclear 1%
      renewable 10%
      Other 1%

      Average in UK by comparison from other suppliers.
      Coal 28.9%
      Natural Gas 44.2%
      Nuclear 17.3%
      Renewable 7.9%
      Other 1.7%

      Thus our bills already include the cost of renewables as the total price we pay is a mix of all sources of power.
      So why is a green levy included on top of this calculation

      • Posted October 26, 2013 at 1:01 pm | Permalink

        Alan Jutson: “So why is a green levy included on top of this calculation”

        It may also be worthwhile to ask them to state the legal authority for charging you for something they have no intention of supplying [directly to you].

        That seems like a fraud at best with possible money laundering implications too.

    • Posted October 25, 2013 at 12:01 pm | Permalink

      Perhaps all the spending on foreign made and owned sea windmills and PV panels along with all the new pylons cables and pipes counts towards our improved GDP figures. Even the rise in the cost of energy should improve the figures.

      • Posted October 25, 2013 at 9:16 pm | Permalink

        When I learned basic economic accounts, imports were subtracted from the outputs of the economy to arrive at GDP.

        • Posted October 27, 2013 at 4:28 am | Permalink

          Mark. I thought this was the case until discussion last year on this blog. So, how would this be done. If police buy BMWs then the expenditure is added to GDP. Then the cars are counted into the import total and the gain in GDP comes off. Could JR confirm that the statistics are in fact corrected in this way?

          Would it not be very helpful to growth if public expenditure was directed to home manufactured products and how would anyone find out if this broke international trading rules?

          How do the statisticians keep track of the values of bits of a power station built from parts which may be a mixture of foreign and home manufacture, paid for in Euro , Dollar or Sterling trading. As ‘growth’ is considered so important, can these figures be relied on?

          Reply The compilation of National Income stats is explained on the government’s website. We are offered both GDP and GNP to show different treatments of the overseas sector. Yes of course foreign trade has to be included to net off the figures.

  12. Posted October 25, 2013 at 8:25 am | Permalink

    Corning shut their Deeside optical fibre production plant, not just because power was expensive, but because the most expensive anti pollution kit on the planet was mandated continually in cycles forcing a never ending expensive drive to be the least polluting optical fibre plant on the planet… Eventually they gave up simply moving production elsewhere in the world, utilising much cheaper anti emissions kit than was ever used here, and therefore pushing up world pollution. We did produce some of the best optical fibre in the world, and invented techniques to do that (which have all been handed to other countries), commanding a premium price on the world market, but all that hard work destroyed by a stupid emissions regulatory regime.

    • Posted October 25, 2013 at 9:05 am | Permalink

      Iain

      They simply do not get it, do they.

      Once lost, never to be returned.

      Burger flipping and coffee making will never make us rich as a Nation, even some of them it would appear are registering/trading through Companies abroad for tax/profit reasons.

      One wonders what will eventually be left here.

      • Posted October 26, 2013 at 1:07 pm | Permalink

        This is not the full story and is to simple. Many people will be leaving Britain due to it’s increased inequality over the next decades. Why should they work for pennies as servants of an elite who grow ever richer whilst telling everyone they must work for less. A country of burger flippers and billionaires. Can this be just put down to envy that the richest 1% in the country have £60 and the poorest 25% have less than 60p?

        • Posted October 26, 2013 at 9:15 pm | Permalink

          I presume by the rich elite you mean our soon to be new masters in the EU Baz.
          At least they are socialist millionaires.
          Is that a comfort to you Baz?

          • Posted October 27, 2013 at 12:08 pm | Permalink

            More a corporate elite is the truth.

        • Posted October 27, 2013 at 7:42 am | Permalink

          Baz
          I agree with you, but it seems that it is those with the money who are leaving, those without are coming.

          Thus less tax available to fund Government policies and benefits.
          Thus we have to cut ack on some benefits, or raise taxes for those of us who remain here.

          The future looks rather grim.

          • Posted October 27, 2013 at 10:10 pm | Permalink

            For sure big buisiness pays a lot of bills. Have I ever denied this?

          • Posted October 28, 2013 at 7:56 pm | Permalink

            There is also a large amount of students and skilled leaving. Where do they fit in this elitist fantasy?

  13. Posted October 25, 2013 at 8:43 am | Permalink

    If the Uk wants to rebuild its industrial base, it has to extract a lot more of the gas under our feet as quickly as possible.

    Well, that won’t happen. You can’t frack in towns and the country is full of Nimbys who will not allow it.

    Even if you do get some gas out, the government will tax it up to the same price as other energy.

    There is no such thing as cheap energy in this country. We have an overbearing government and state that needs to tax everything to death to support itself.

    • Posted October 25, 2013 at 7:51 pm | Permalink

      Mike Wilson: “We have an overbearing government and state that needs to tax everything to death to support itself.”

      To be fair, we’re gonna think about scrapping HS2 and maybe toy with getting rid of Foreign aid and if we are feeling really mischievous we’ll hint at not paying some of the EU dues.

      Then everything will be tip top. We can all go on slaving away to feed the State because even if you did those three things – all the other obligations the government has will still exist.

    • Posted October 25, 2013 at 11:18 pm | Permalink

      You can frack in towns. You will find plenty of “wells in urban Los Angeles” if you know where to look – try searching on the phrase in inverted commas. As a starter, have a look around the Beverly Center Shopping Mall in Beverly Hills in satellite (zoom in) and street view on Google maps. You’ll even see a drilling rig if you look carefully on street view.

      https://maps.google.co.uk/maps?q=Beverly+Center&hq=beverly+center+la&cid=0,0,431158063057559469&t=h&z=16

      There are about 50 wells at this site.

      • Posted October 26, 2013 at 9:39 am | Permalink

        Also the other regularly cited examples include Tarrant County in Texas and frac’ing under the Dallas Fort Worth airport .

        Standard lateral lengths in some US shale formations are almost 10,000 feet .

        Approach from the North and the South and one could frac a band 4 miles wide whilst locating the infrastructure outside .

  14. Posted October 25, 2013 at 9:13 am | Permalink

    Mr Redwood, Do you support frac’ing in the UK? If you do, how would you respond to local residents worries in your constituency should the gas be discovered there?

    Reply Fracking is already used by the oil and gas industry in the UK. It is properly regulated to make sure it does no damage to water courses etc. If there is gas in my constituency then I will argue for proper safeguards for residents, extraction as far away from homes as possible, neat concealment of the well heads as at Wytch Farm in Dorset, usual planning controls and decisions to protect local interests, local sharing in profits etc.

    • Posted October 26, 2013 at 9:51 am | Permalink

      John ,

      Why should locals benefit more from these hydrocarbons than the country as a whole ?

      Surely this is just another example of the handout culture which you would be quick to criticise elsewhere ?

      As you know I’m in favour of extending communal ownership of subsurface mineral rights to surface rights by implementation of a land value tax – land being a natural resource too .

      One has to drill where the hydrocarbons are located , not where one would like them to be located .

      Why should the hypothetical single mother in a high rise flat in a region which is not prospective for hydrocarbons not benefit just as much as someone who is located in an oil province ?

  15. Posted October 25, 2013 at 9:36 am | Permalink

    £55,000 per annum is the average, so I read yesterday, and as I understand it they were not being asked to take a cut, only a freeze. On learning that, any sympathy I might have had for them instantly disappeared.

  16. Posted October 25, 2013 at 9:47 am | Permalink

    I know the closure of the Grangemouth plant should be of great concern to us all, but I couldn’t resist a laugh at Salmond when one of the biggest employers in what he hopes will soon be an independent Scotland totally ignored him. The great man who hopes to lead Scotland to greatness suddenly finds he has a real problem and can do nothing about it. And for once Cameron has enough sense to say nothing! Brilliant!

  17. Posted October 25, 2013 at 9:52 am | Permalink

    Deindustrialisation is both the aim and consequence of the expensive energy policies of successive UK governments. Their extended parliamentary and diplomatic campaign (via the shadowy Globe International) to persuade others, notably India and China, to follow the UK/EU route to expensive, unreliable renewable energy has failed.

    Dear energy, allied to hopeless tax policies, has contributed significantly to the destruction of UK owned industry and is, inexorably, leading to the evacuation of the country by foreign owned businesses as many examples already posted in earlier comments reveal. The one exception appears to be the late dash to sign up for 25 year long subsidy regimes. For the rest the lemming like dash for the cliff edge seems assured.

  18. Posted October 25, 2013 at 10:00 am | Permalink

    A Grangemouth director stated on Newnight the other night that the average salary is £50k + PA and pensions contributions are 60% of that, Gas from the North Sea has dried up so they have to re structure so as to enable the processing of imported fracked gas from the US.

    Given these simple facts (without knowing the whole story leading up to this) I find it absurd that UNITE have behaved as they have – where else are people going to get £50PA+ jobs in that part of the world?

    Only now that the company has announced its intention and showed they weren’t bluffing have UNITE come on board.

    Anyone stupid enough to vote Labour I’m afraid with Uncle Len pulling the strings of a Labour govt this is what the UK would look like not too long after 2015 – lets hope that Mr Cameron grows a pair and is sincere about the EU then gets a majority – otherwise we’ll all be in trouble.

    • Posted October 26, 2013 at 1:05 pm | Permalink

      peter davis: “where else are people going to get £50PA+ jobs in that part of the world?”

      Banking and finance? Oops!

      peter davis: “otherwise we’ll all be in trouble.”

      We’re all in trouble!

  19. Posted October 25, 2013 at 11:33 am | Permalink

    The Grangemouth affair reminded me very much of the stand off between “Red Robo” and British Leyland . Without detailed knowledge of what the settlement included , I am pleased that Ineos took the stand they did and appear to have put UNITE in their place . Management/ownership in the past have been too reluctant to face up to Unions ; it brought about a substantial reduction in our manufacturing activity – much to the detriment of our economy . The basic cost of our energy supplies is a highly influencing factor and it ought to be more aggressively attacked by employers and the Government ; allowing the EU Green policy to cast the shadow it does is a ghastly mistake .

  20. Posted October 25, 2013 at 11:44 am | Permalink

    A bucket of cold water (with extra ice) has been tipped over the Unite union and Scottish ‘government’ by the management of Ineos. Maybe this will sober them up for a few months and force them to concentrate on reality and the real world which does not owe them a living. The posturing Marxists in Scotland have had it too easy here – big frogs in a little pond; well this should help to shake them up. I just hope that Ineos keep the pressure on.
    These people are very lucky if they hold on to their jobs. Many of the direct employees do relatively little. It’s the sub-contractors who do much of the work and they suffer immediately with almost instant lay-offs. The Unite Union has a lot to answer for. Not only have they created havoc with peoples’ lives, they also interfere with the wider political process and use their power to actively campaign and operate against political opponents of the Labour Party etc ed

  21. Posted October 25, 2013 at 12:08 pm | Permalink

    Don’t forget the closure of the aluminium smelter in Anglesey.

    There are lots of examples of industry being driven off-shore to places where they couldn’t give a jot about the obsession with CO2, so it increases emissions, especially when you consider transporting the product back to the UK.

    Justifiably, there’s a great deal of interest in domestic electricity bills, but dear energy and pushing industry offshore, has a wider economically damaging and inflationary effect which seems to be over looked.

    • Posted October 26, 2013 at 9:57 am | Permalink

      It’s just like the offshoring of manufacturing .

      The Western World was in a virtually unassailable position and China would not have been able to compete in a straight fight .

      Instead they persuaded companies to MOVE existing manufacturing to China .

      Same with dear energy . The boys in the City of London will be investing in facilities in China so it’s abs0lutely essential for them that UK competition is made unviable .

      CO2 emissions controls in the Europe is just a way of protecting the City of London and Wallstreet’s investments in overseas infrastructure .

  22. Posted October 25, 2013 at 1:15 pm | Permalink

    QE does not help, as this puts up the cost of purchasing raw materials. But we won’t talk about that.

    As for the Unions, they really need to learn that Globalization has changed the game completely. Business can move to other countries as indicated in this piece.

  23. Posted October 25, 2013 at 2:17 pm | Permalink

    Nice to see a defence of the Energy Companies (by Jeremy Warner in the Torygraph). Nobody seems to want to give credit for the fact that they have to make public a factual breakdown of their sales prices, which nobody but nobody can find fault with in terms of what the Companies can do about any of it plus I should have thought that having six big Companies (hardly a monopoly) competing plus smaller ones would be enough in itself to ensure bills are kept as reasonable as possible……or is each of them individually able to be exploitative?…..which would hardly make sense.

  24. Posted October 25, 2013 at 3:02 pm | Permalink

    I frequently accuse the eco-(enthusiasts ed) and other assorted lefties of being intellectually challenged. For proof it is not necessary too look any further than the energy policies that the UK and EU are currently pursuing. To the sane and rational it was obvious that these policies even before they came into force were going to be economically damaging. Now that the consequences of these policies are plainly doing what we predicted it would be thought that these people would back down and accept that their agenda cannot be followed and more practical methods have to be followed. This however is not the case and they are striving through the EU parliament and politburo to drive through regulations that will make fracking not economically viable. There is an unhealthy haste in what these (greens ed) are doing as the dangers if that is what they are are some decades away by which time many new innovative methods will be found and a much better understanding of what the problems are if, I repeat, there are any. It is typical of the left being intellectually challenged they do not think any thing through properly or when they do understand that the consequences could be disastrous they do not care if it gives them political or vested interest’s advantage. What we always get from the Greens, Labour and Lib-Dems are policies that give short term gains (to haul in gullible voters as an added bonus) for long term loss.

  25. Posted October 25, 2013 at 4:25 pm | Permalink

    The recovery plan requires substantial expenditure on new facilities to import US gas.

    How are they going to get the US gas to Scotland? By building a giant pipe through the ocean or buy using a fleet of ships? Also what incentive does the US have to sell this gas at below market rates?

    BASF have just announced the closure of their Paisley chemical plant, owing to high energy prices and other costs.

    Tata Chemicals closed its soda ash factory at Northwich owing to high gas prices.

    Where are these companies moving production to? If it’s somewhere in the EU then this implies that EU laws aren’t the main cause of high energy costs.

    Also how many people worked in these jobs? I hear that most of the manufacturing is automated, so they only need a few staff.

    Dear energy is one of the worst features of an EU regime that is giving a big competitive advantage to Asian and Amercian industrial competitors.

    Yet Germany manufacturing doesn’t seem to be having any problems due to the EU’s energy policies. Perhaps the UK should examine how Germany is able to cope.

    Modern assembly plants have very large power bills as they have automated extensively. Power can often cost more than wages in a modern factory.

    If you have few employees and a lot of machines it’s pretty common for power to cost more than salaries.

    • Posted October 26, 2013 at 9:19 pm | Permalink

      You do make me laugh Uni
      Try looking up some of the questions you pose on the internet then you won’t look so foolish.

  26. Posted November 1, 2013 at 3:04 pm | Permalink

    might being derogatory about green levies actually stem from the fear of losing stakes in fossil fuels and capital management?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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