The government and Opposition in the Uk are united in wanting an industrial recovery. Now they need to agree on a radical change of energy policy, as you need cheaper energy to get the industrial revival.
The most recent GDP figures show the economy grew in the first quarter of this year, despite a further fall in manufacturing output. Rising public spending and higher private sector service output combined to more than offset the further falls in construction and manufacturing.
Leading manufacturing nations like China and the US have much cheaper energy than the UK and western Europe. Energy costs are crucial in areas like cement, glass, ceramics, aluminium and steel production. Energy costs are also often more important than wage costs in highly automated modern factories, where machines do most of the work.
Within the EU high energy costs are a way of life and a policy choice. Germany, the most sucessful manufacturer within the area, is increasingly cutting loose from EU policy, in a dash for coal based electricity production. The EU itself has offset some of the damage being done by its carbon scheme, through issuing so many permits that the carbon price has collapsed. The UK has imposed a carbon tax above the carbon price, and is still engaged in developing more high cost energy.
I have renewed my calls this week for a short term policy to save our old power stations and keep them running for longer, and a medium term policy of going for shale gas and more gas based power production from new stations.
I read today that the new Japanese government is preparing to ditch its Kyoto carbon reduction targets and generate more power from coal as part of its policy to help industry and consumers.