It is often politely forgotten that the EU began as a strategy to stop Germany ever making war on the rest of the continent again. The foundational body of what became the EU, the Coal and Steel Union, took shape on paper even before the war finished. Why coal and steel? For the same reason the victorious Allies took control of the Ruhr district after WWI: to deny Germany, if necessary, unfettered access to the essential materials of modern warfare.
Which puts into perspective China’s aggressive drive to dominate world production of steel. Like the former Allies foolishly jumping on the disarmament bandwagon while Hitler was tooling up his Third Reich, a string of Western nations have dismantled their domestic steel industries. Australia’s last steelmaking plant at Whyalla is teetering on the edge of closure, something even the Albanese government has belatedly realised would be a critical blow to our defence capability.
In Britain, the Chinese owners of the once-mighty nation’s last steelmaking plant are trying to shut it down. Chinese company Jingye began cancelling orders for raw materials needed to keep blast furnaces at the British Steel complex in Scunthorpe running. For the first time since the Industrial Revolution, Britain would be unable to make virgin steel.
The defence implications of this historic retrograde step are so obvious that even the lamentable Starmer government was moved to convene an emergency session of parliament. Parliament voted to take emergency control of the plant. Even, reportedly, to the point of using police to bar Jingye staff from the site.
Labour’s left-blindfold led them to blame the potential calamitous shutdown on ‘privatisation’ and ‘neo-liberalism’. This is simply untrue.
British Steel was not a victim of unfettered free trade, or being undercut by unscrupulous foreign suppliers. There is a huge premium in the market for virgin steel whose provenance is indisputably in a top-tier country, especially from the aerospace and defence industries. The plant’s prospects were ruined by policies that successive British governments have imposed willingly, mainly in the realm of energy policy.
It’s not just Britain that is cutting its own throat as a sacrifice on the altar of ‘Net Zero’. China has accomplished what even victorious France and Britain failed to do: dismantle Germany’s industrial might. Germany’s biggest industrial corporations are all moving to China.
All because the demented obsession with ‘Net Zero’ has made electricity so cripplingly expensive that industries can’t afford to run in Germany any more. Britain has suicidally followed suit.
There have been damaging regulations specific to steel production, such as the coking coal ban, but it’s what has been done to British Steel’s domestic market that should now be the government’s focus.
Britain’s exceptionally high commercial electricity prices have recently gained media attention, but this has been a chronic problem over many years. This is not merely an unfortunate overhead that makes firms less profitable; year after year it has seen entire sectors rendered completely uncompetitive in Britain.
As has happened everywhere that’s rushed with lunatic haste into dismantling their coal and nuclear energy production in favour of solar and wind, electricity prices have skyrocketed.
After years of decreases since the 1980s, British energy prices began rising after the passage of the Climate Change & Sustainable Energy Act of 2006. This began the process of imposing the cost of renewables subsidies onto consumers. They have steadily risen ever since. Despite the claims of renewables campaigners, who point to the low price of wind and solar power during the specific moments when they are at their most productive, it is the huge costs of back-up, balancing and subsidies that are imposed onto the system by intermittent generation that is responsible for these increases. Furthermore, a persistent bias against redundant capacity, especially in storage, has made Britain exceptionally vulnerable to wholesale gas price fluctuations. These have all been political choices.
It’s not just about ‘robbing Asiatic coolies’, as Orwell bluntly called it, either. Cheap Asian labour is only a tiny part of it. The real culprit is simply the staggering cost of ‘renewable’ energy.
Industries have been forced out due to increasing energy prices since the mid-2000s, and these have generally been in far higher value-add sectors. These include medical equipment manufacturers, machine tooling, and substantial elements of the automotive supply chain. Often these industries involve groups of companies with operations across Europe, who quietly moved their most energy intensive operations onto the continent. There, they could avoid the UK’s energy prices, while retaining a highly skilled European workforce.
These were often the kind of industries that needed high quality virgin steel, rather than recycled or cheaply imported products. With each one that vanished from the UK, so the market for domestic steel decreased.
The one good outcome of this debacle is that the British government will finally be forced to shoulder the costs of their own idiotic policies.
The government will now be forced to reckon with the enormity of the costs it has imposed on British industry. Perhaps, the Chancellor of the Exchequer, or one of her successors, will have the motivation to face down the renewables lobby, and speak up for the bits of the British economy onto which the burden of decarbonisation has been forced.
As if. A celebrity climate activist would sooner give up their private jet travel.
