Job losses due to energy crisis would be 'unforgivable' says Keir Starmer in Sheffield

It would be ‘unforgivable’ if short-term energy price rises led to long-term job losses, Sir Keir Starmer said on a visit to a Sheffield steelworks.

Thursday, 14th October 2021, 4:53 pm

The Labour leader slammed the Government for ‘squabbling’ and not talking to industry while energy prices were ‘going through the roof’.

It followed 10 years of government failure ‘to get ahead of the problem’, he said, which had seen a collapse in storage capacity and stalling in the nuclear sector.

If this complacency led to job losses it would be ‘unforgivable,’ he added.

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Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves during a visit to a steelmill in Sheffield, South Yorkshire. Photo credit: Stefan Rousseau/PA Wire

He said: “These are quality jobs in an important sector that still needs to be protected now and into the future. There’s a real sense the government is not prepared to have these conversations.”

Sir Keir spoke to media following a tour of Outokumpu’s SMACC meltshop in Tinsley. It recycles scrap to make ‘semi-finished’ stainless steel products including slab, bloom and billet which are sold to other firms which make finished products.

Loans, grants or other support for energy intensive industries were common in other countries ‘but not here’, the Labour leader added.

“We need a proper plan that has to be part of a three-pronged plan for ‘secure, efficient and affordable’ energy,” he said.

Inside the Outokumpu SMACC meltshop in Sheffield.

Wholesale gas prices have soared 400 per cent this year, sparking protests and warnings of potential shutdowns and job losses in sectors including steel, glass, ceramics and paper.

Mr Starmer said it was time to ‘diversify at speed,’ adding he supported small modular nuclear reactors, which are being developed in Sheffield.

Shadow chancellor Rachel Reeves said the UK had always been at a competitive disadvantage on energy prices compared to Europe but that gap had increased ‘five-fold in the last few months’.

Industry needs help to get through the winter but ‘government aren’t even listening to them’, she added.

Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves watch a stainless steel making process during a visit to Outokumpu Stainless Ltd in Sheffield. Stefan Rousseau/PA Wire

Labour has pledged £3bn to help the steel sector get near to zero carbon by 2035. It recognised the ‘huge benefits’ to the country and business, she said.

Some 280 people work at the Outokumpu site in Tinsley.

Doug Patterson, regional officer for Unite the union, said it could struggle to attract business if energy costs remained high - they are currently 60 per cent cheaper in Europe. As a small part of a large group, management could look elsewhere for the best return on investment.

He added: “Without investment any factory will be looking over its shoulder. The workforce is reasonably optimistic at the moment, they’ve worked most of the way through furlough and there is visibility on orders to this time next year.”

A KRESS carrier used to move the 100 tonne 'slag pot' at Outokumpu, Sheffield.

But the sector needed action now, he argued.

He added: “Successive governments have failed to recognise the importance of steel, you can’t have a manufacturing industry without it.

“Otherwise we’re a hostage to foreign supply, as we are with energy from Russia.”

Parts of government had shown they were aware of the issues, he added.

“But whether they have the ability or strength to challenge Boris Johnson, we don’t know,” he said.

Mr Johnson has previously said ‘it’s not government’s job to fix all the problems’, in reference to the gas price crisis and shortage of HGV drivers.

Warning sign at Outokumpu's Tinsley site.

A Department for Business, Energy and Industrial Strategy (BEIS) spokeswoman said they remain committed to working with industry and consumers to keep costs down and identify how they can be allocated in a way that incentivises user behaviour that drives decarbonisation.

She added: “We are determined to secure a competitive future for our energy intensive industries, which is why we have provided £2 billion in recent years to help with the costs of energy and to help protect jobs.

“Ministers and officials continue to engage constructively with industry to further understand and to help mitigate the impacts of high global gas prices.

“Some countries in Europe have lower industrial electricity prices in part because some costs are recovered from consumer bills.

“The Government is also reviewing its public procurement rules to better able to meet the needs of this country now we’ve left the European Union.”

Last week, business secretary Kwasi Kwarteng met representatives from energy intensive industries, including steel, cement and chemicals, to discuss high global gas prices as part of his ongoing engagement with industry, she added.

She added: “Our recent and on-going work to support energy intensive industries included providing more than £2 billion since 2013 to make electricity costs more competitive.

“In 2020 this relief was worth over £122 million in compensation for the indirect emissions cost due to the emission trading system and carbon price support mechanism and over £400 million in reduced electricity costs associated with funding Contracts for Difference, Renewables Obligation and Feed In Tariffs.

“The UK Government announced £315 million of funding in the 2018 Autumn Budget for the Industrial Energy Transformation Fund, with the funding available over the period to 2025.

“ The Fund supports businesses with high energy use to cut their bills and reduce carbon emissions. Phase 1 of the programme made up to £70 million available over two separate application windows and businesses were able to apply for support with energy efficiency deployment projects and energy efficiency and deep decarbonisation engineering studies.

“Phase 2 launched on in September, with around £220 million of funding, to be invested in energy efficiency projects but to also support the deployment of ‘deep decarbonisation’ projects.”

The government previously announced a £250m Clean Steel Fund that will support the decarbonisation of the steel sector, supporting its transition to new low carbon technologies and processes.

She added: “We have published details of a steel pipeline on national infrastructure, which are anticipated to require around 5 million tonnes of steel over the next decade.”

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Thank you. Nancy Fielder, editor.

Outokumpu meltshop.
Sir Keir talks to media in Sheffield.
Doug Patterson, Unite regional officer.