British manufacturing could disappear for good under Labour

Telegraph

12 hours ago

Sir Keir Starmer is gaslighting the great British public. The news that net zero taxes will be slashed for thousands of manufacturers in the long-overdue industrial strategy is of course to be wholeheartedly welcomed.
Yet, the idea that this means 'Britain is back and open for business,' as the Prime Minister declared last week, really is preposterous nonsense.
Perhaps, if Starmer extricated himself from the Westminster bubble even just for a few seconds, he may be able to spot something deeply troubling unfolding across the country on his watch: far from being open, Britain's industrial base is in grave danger of shutting down for good.
It's not as if it's happening gradually. The pace at which UK heavy industry is collapsing under the dead hand of Labour is truly extraordinary. Barely a day goes by without another major factory waving the white flag.
The latest casualty is Lindsey Oil Refinery in north-east Lincolnshire – one of the country's last remaining refineries and a vital regional employer, as my own father will attest to. The plant provided him with much-needed work in the late 1980s after he left the RAF.
With its parent company forced to call in the administrators on Monday morning, a facility that churns out nearly 5.5m tonnes of oil a year – equivalent to roughly about one tenth of the country's capacity – is now in the hands of a government-appointed special receiver.
At this rate, the Humber estuary and Teesside may soon be competing to become the country's biggest industrial graveyard as one-by-one, the big plants that dominate the east coast threaten to crumble into the North Sea.
In Hull, the owners of Vivergo, the UK's largest bioethanol plant, are threatening to pull the plug.
Further north in Redcar, the axe hangs over another big bioethanol producer, while barely a stone's throw away, the Olefins chemicals complex is scheduled for permanent closure. Among the largest of its kind, the site has been a feature of the Teesside skyline since it began operating in the late 1970s.
With Labour asleep at the wheel, it is no exaggeration to say that this Government could conceivably preside over the total disappearance of this country's manufacturing capabilities.
The North Sea oil and gas industry is surely past the point of no return. The future of other so-called foundational industries such as chemicals, cement, glass, paper, ceramics are all similarly bleak with catastrophic consequences for regional growth, national output, and our self-reliance. Every factory closure threatens to make us even more reliant on foreign imports.
It's not as if the Government has any answers, other than the usual hurried handouts. With Jonathan Reynolds reportedly willing to offer support to Lotus to persuade the struggling Chinese-owned carmaker not to shift production to the US, subsidies are at risk of becoming the default solution for ministers bereft of proper ideas any time a fire needs putting out.
But history tells us that's never a real solution. Lotus may yet stage a miraculous recovery, but this is a company that has survived for years on handouts amid a tortuous battle to make money. Most of this has come in the form of generous loans from its owners running into the hundreds of millions of pounds, but it has also been the recipient of government funding on several occasions.
Taxpayers are entitled to ask why they should have to keep picking up the bill whenever a company is in trouble.
In the case of Lindsey Oil Refinery, its owners are facing calls for an official inquiry after they were 'unable' to answer questions about its finances, energy minister Michael Shanks said.
Lotus's latest issues, meanwhile, are largely the result of US tariffs, and the bioethanol sector says it will be unable to withstand the onslaught of 1.4bn litres of duty-free ethanol allowed under the UK-US trade deal.
Ultimately, the responsibility for a crisis as serious as this has to lie with those in power. It is the consequence of a lethal cocktail of long-term neglect, complacency, short-termism and muddled decision-making.
Labour's long-awaited Industrial Strategy will provide some relief – but only some. A reduction in green levies will be meaningful for many manufacturers, but for a great number it is a case of too little, too late.
If Sir Keir really wanted to protect British industry and commerce, he would temper the green crusade of his fanatical Energy Secretary, which almost seems deliberately designed to put swathes of perfectly viable companies out of business just to satisfy the militant activists at Greenpeace and Just Stop Oil.
The plight of Lindsey is a stark reminder of the folly of over-burdening companies with environmental costs.
In corporate filings, the company talks glowingly about its embrace of eco-friendly initiatives such as LED lighting, electric cars, and renewable energy. It even felt compelled to swap face-to-face meetings for zoom calls in the name of saving the planet. One wonders whether the plant may have fared better if management had been less distracted by box-ticking green initiatives.
But the Prime Minister is weak, as proven by the horribly one-sided trade agreement he returned from Washington with. Starmer's deal with Trump sold Britain's ethanol makers down the river.
One thing that's for certain is that repeated handouts are unsustainable. Somebody needs to get a grip on the tsunami of issues – not just green taxes but other energy costs, along with reams of red tape, and National Insurance rises – that threaten to drown businesses.
Starmer faces a choice: find a way to allow more businesses to survive without taxpayer money or allow a slew of failing companies to shut down and accept that the foundations of the economy must change.
The current approach is neither one nor the other. It harks back to the days of British Leyland – but in some ways it's worse. At least then the policy of nationalising everything was deliberate. In the absence of anything remotely coherent under the bumbling duo of Starmer and Reeves, the flurry of interventionism seems almost entirely accidental.