Cartoon by StanThe rising cost of energy has started to have serious consequences, not just for everyone who needs to heat their home, but also for businesses. Costs are rising across the board and many people who already struggling to run small businesses in sectors such as care or hospitality are now being hit with yet another major problem. After a year that had already left them reeling with exhaustion.
It is therefore not entirely surprising that some of the largest consumers of energy in the country are also struggling and are calling for the government to step in and help them before it’s too late. Manufacturers of steel, automobiles, chemicals, and glass are queuing up to ask for help from the government. They are saying that they can’t pass on costs that rise as quickly as gas and petrol prices have recently and that they must be subsidised by the taxpayer if we want these strategic industries to continue to exist and to provide jobs.
Protecting energy companies vs tackling the climate emergency
The government is therefore faced with a massive dilemma. Does it subsidise the cost of consuming oil and gas in the middle of a climate crisis that gets worse every year? Does it abandon Margaret Thatcher’s golden rule and subsidise lame-duck industries using taxpayers’ hard-earned money? Or does it watch businesses that employ a lot of people go bankrupt, at huge costs to local communities in the regions? You know, those places where the Conservatives destroyed lots of jobs in the pursuit of purist, extreme, free-market theories, before suddenly deciding their neglect was an exploitable scandal.
The dilemma isn’t much easier for those of us on the left. Many of us put forward policies that would have avoided much of the problem and placed the country on a much more secure footing for the future.
Environmentalists were right when they started calling many years ago for major investment in better home insulation and for every home to have the capability to provide most or all of the power it needs via solar panels, heat exchange units, and battery storage. We were also spot on when we asked for research, development and investment in low-energy manufacturing techniques. Fuel use would also have been hugely reduced if the government had opted for better public transport, less commuting and more home working, instead of relying on just-in-time deliveries driven by truck drivers exhausted from sleeping in the cab and driving for hours on motorways.
Policy decisions for a sustainable future
Unfortunately, “We told you so” and “We wouldn’t be in this mess if you’d listened to us” are not entirely helpful or appealing policies. People might be technically interested to hear about the wisdom of past policies, but what they actually want to know is what policies we support right now.
Some choose to prioritise traditional heavy industry and jobs over carbon dioxide emissions. That leads them to reconsider fracking, to want to open the Cumbria coal mine, and to be desperate to get every last drop of oil and gas we can out of ‘British’ fossils so that we don’t have to rely on those nasty Russians. You know, those pesky oligarchs who use London to launder ill-gotten gains channelled via overseas accounts and as a result become so comfortably off that they can afford to buy the silence of the Conservative Party with their small change. Allegedly!
Yet it is hard to see how a strategy of investing scarce money in helping industries carry on pumping out large quantities of CO2, using increasingly outdated technology as a way of constructing a successful future for the country. It is like encouraging people to use canals when railways have been discovered or subsidising boiler makers in an era of information technology.
Encouraging innovation, not nostalgia
So, if we believe that industry has a future in the UK, then we need a strategy that provides help in a way that encourages innovation not nostalgia. Put simply, no subsidies can be offered to industries that are heavy consumers of power to help them carry on being profligate with our future. We need to see real changes in business practices, not encouragement to try to preserve clumsy wasteful technology.
It is only reasonable to offer subsidies to secure major restructuring. Even companies that are struggling to survive will have investment programmes and capital renewal budgets, not just their basic running costs. State subsidy of fuel costs should be out of the question. Helping companies to transform their future is a different matter entirely, particularly if the government takes part ownership of the company to help see through the transformation. That is how help should and could be structured.
At his party conference Johnson made much of the need to develop a high-skill high-wage economy. He was using it as a cover up for an economy that is short of workers in unglamorous jobs like care, crop picking, food processing, and lorry driving. What we need to hear now is what his strategy will actually be to help secure change in sectors of British industry that are screaming with pain from price rises.
He has proved very capable of issuing slogans about levelling up and about supporting the regions. The time has come to see whether he is capable of producing some genuinely transformational policies. Because industry cannot be powered by hot air. Even with the enormous quantities that Johnson produces.
