Labour should be leading the way on the climate

By Charlie Wilson

Keir Starmer’s recent Guardian article stakes out a distinct position from the government, but still falls well short of what’s needed. Perhaps recognising that his pitch to older, conservative “patriotic” voters and attempt to reassure the ruling class that Labour is a safe opposition, is leading to a loss of younger more internationalist voters to the Greens or despair; and possibly because he has looked out of the window at the weather and maybe watched a film of floods rushing through towns washing away cars like so many straws, he has felt the need to acknowledgethat:

  • Current extreme weather events mean the climate crisis is happening now and requires immediate action on a significant scale.
  • The UKs chairing of the COP26 conference means that it has a responsibility to lead.
  • Under this government, it won’t.

He quite rightly says “Time is short, and history will not forgive a failure to act now.” The question for Labour therefore is what scale of action will it support to meet that imperative?

Labour’s leadership draws inspiration from Biden’s infrastructure plan, but does not note the extent to which this falls well short of what would be needed for them to meet their obligations. To reach emissions levels compatible with a 1.5C increase, the US would have to cut its emissions by 83% by 2030, not the projected 50-52%. Any shortfall will be met either by temperatures rising beyond 1.5C, or other countries having to take up the slack. The current US campaign to direct blame at industrialising countries in the Global South, despite their much lower per capita carbon footprint, is designed to achieve the latter.

The Labour right see the US attempt to try to keep up with China’s rise in Biden’s commitment to state infrastructure spending and abandonment of neo-liberalism to boost growth, as a helpful transatlantic intervention into UK politics that could make moderate state spending mainstream economics here too. In their eyes, this simultaneously burnishes the notion of US leadership as a progressive force globally; thereby justifying their pro US foreign policy stance. But as this stance is primarily aimed at constraining the growth of China, which generated the abandonment of neo liberalism in the first place, this is the policy equivalent of one of those Celtic knots in which a dragon consumes its own tail.

Although Labour’s plan is definitely better than the Conservatives, it would be hard not to be. Tory spending priorities are perverse. Their ten-point plan earmarks just £12 billion to the “Green Industrial Revolution” up to 2030. This is less than half what they plan to spend on expanding the roads network in the same period and they are increasing military spending by twice as much in half the time; £24 billion up to 2025.

Labour would put in a far more reasonable £30 billion to “a green recovery from the pandemic” to create “hundreds of thousands of secure jobs”. The precise number of jobs projected to be generated by this is 400,000. This is well below the £85 billion investment proposed by the TUC last June, aimed at creating 1.2 million jobs within two years. An alignment with the TUC would create a co-ordinated approach between Labour in Parliament and the trade union movement across the country that could not help but create a positive synergy; possibly why it has been avoided. Starmer’s line is essentially Parliamentary, not one aimed at campaigning beyond constitutional niceties.

Starmer’s argument that Labour’s plan would “ensure that we buy, make and sell more in Britain” puts a global imperative in a framework of nativist protectionism. His attempt to squash a potentially inspiring international affirmation of humanity into the sort of “charity begins (and ends) at home” mind set of his supposed target voters, requires an almost mercantilist approach to the economy, in a slightly flattened version of Johnson’s nationalist boosterism. “Our green industrial revolution will be powered by the wind turbines of Scotland and the North East, propelled by the electric vehicles made in the Midlands and advanced by the latest technologies developed in Wales, so we can look ahead to a more prosperous, greener future”. As always, Johnson’s language flows far more lavishly than his proposed level of investment. Starmer’s language is – as ever – more prosaic, but the insularity is similarly claustrophobic and the level of proposed investment well below what would be needed for the UK to “do its bit” by the rest of the world. This is an existential human challenge. An insufficient effort festooned in bunting belittles it.

He gives three examples.

  • “We would be rejuvenating our car industry while helping it move to the production of electric cars”.
  • “We would be powering our homes with offshore wind turbines built in Britain”…
  • “We would be manufacturing clean steel to build our schools, hospitals and railways.”

Looking at each of these in turn.

Cars. The presumption here seems to be that we can maintain existing transport habits, just switching from petrol and diesel cars to electric. While fossil fuel vehicles have to go – and the sooner the better – we should be aiming for fewer cars overall with an integrated transport plan to encourage public transport, walking, cycling and electric scooters. The same goes for haulage – from cargo bikes for small deliveries inside cities – which cut emissions by 90% and are 60% quicker than vans -to rail freight and electric HGVs for longer hauls. The imaginative work being done in cities around the world on 15-minute neighbourhoods, pedestrianisation, light rail and metro systems, needs flagging up. An obsession with “leading the world” can too often divert attention inwards and away from places we can all learn from and follow.

The notion of “our” car industry is also a “patriotic” mystification on two levels. The UK volume car industry is entirely owned by multinational companies based in other countries. More importantly, it is not owned by the people working in it, nor by the state on their behalf. So not “ours” at all. The recent investment in electric car and van manufacture by Datsun in Sunderland and Stellantis in Ellesmere Port has been contingent on the government stumping up half the cost of their investment; around half a billion pounds in each case. This is also the case with the two other sectors mentioned by Starmer.

Wind turbines. It has to be said that we don’t just need these offshore but on land. And we don’t just need wind turbines, but tidal and solar power too. And not just powering our homes, but everything else. And as fast as it is possible to do it.

Given that the companies currently investing in offshore wind are multinationals, like Siemens and Vesta, with an integrated international supply chain, most of the components for the turbines will be manufactured elsewhere. Starmer – in complaining that turbines are “built thousands of miles away” – is attempting to connect with a campaign currently being pushed by the GMB for a “Great British Supply Chain”; seeking to make continued investment in offshore wind contingent on local manufacture of jackets and towers. As there is no chance for such a supply chain on such a scale to be put in place in the immediate future – even were the huge funds required to invest in it to be found and deployed – this boils down to a call for the investment in offshore wind to stop. It is also a specific choice of component; because the high skill, high value-added part of the wind turbine is the nacelle, the motor. As the patents for these are held by Vesta and Siemens – Gamesa, they tend to be manufactured in Denmark, Germany and Spain. The GMB seems less concerned about this work being done in Europe than they are about the manufacture of jackets and towers “in Asia”, which is repeatedly presented as a threat. They also wax lyrical about the carbon emissions produced by shipping in imports of turbine components, but they are keen to encourage exports; which presumably arrive at their destination by magic.

Without a completely local supply chain, government inducements have nevertheless encouraged investment in tower and jacket manufacture in Lincolnshire by GRI Holdings and foundations by SeAH Wind Ltd, while Siemens is manufacturing blades in Hull and GE Renewables will have also have a blades plant in Teesside, operating from 2023. Some of the companies manufacturing towers and jackets have construction yards in different countries, with workers on very different terms and conditions and different local costs for raw materials. Korean owned CS Wind for example (1) has a large yard in Vietnam, an office in Canada, other yards in China, Taiwan and Malaysia and, for two years, built jackets and towers at Campbeltown in Scotland. This last investment was entirely contingent on a guaranteed contract and government underwriting. It closed in 2019 partly because the yard itself was incapable of producing towers on the scale and at the cost required for further contracts; though it could have managed the smaller onshore towers, had the government not spent such a lot of time and energy encouraging Nimbyish opposition to them, thereby shutting off this option. None of this was the fault of the workers in the Vietnam yard who were, and are, not the enemy of the workers in Scotland and whose jobs are every bit as important.

It is welcome that Starmer makes no mention of nuclear, an option being pushed hard by the GMB and Prospect with motions to the TUC in September, though the strong representation of these unions on Labour’s Just Transition Commission means that this is an oversight not a policy choice. Nuclear is an expensive White Elephant and the impact of any decision to cut out Chinese investment on Cold War grounds is likely to make all plants currently planned economically unviable. Overall, the unit cost of nuclear energy is already significantly greater than that of renewables. That high unit cost is passed on in energy bills. The projected costs for the fleet of “Small Modular Reactors” – essentially scaled up engines from nuclear submarines made by Rolls Royce – is 20% more than that from the large reactors currently being built or planned for Hinckley Point and Sizewell, while the costs of renewables are falling all the time.

The current rise in fossil fuel costs – which is about to hit everyone’s bills this winter – is paradoxically being used, by the sort of Conservative backbenchers who can’t see further than the ends of their noses, to argue that we can’t afford to make the transition away from them. On the same logic, anyone campaigning for new nuclear can’t avoid having to deal with how the additional costs will be met and by whom. There is also the wider consideration that nuclear power stations are necessarily sited on coastlines, to make use of water cooling. There can be no confidence that these sites will be safe from flooding in the event that sea levels rise rather faster than the IPCC currently projects; which they almost certainly will. The additional complication is that, while the government may be keen on this in principle, their ministers and local government leaders act like scalded cats if there is any suggestion that the nuclear waste currently in search of long-term storage might end up anywhere near them. Junior Minster Victoria Atkins declared herself “stunned” that her constituency was being considered for a Geological Disposal Facility, after her Ministerial colleagues had kept the news from her; while Tory Teesside Mayor Ben Houchen spoke for most everyone else in local government when he said “The last thing we need as we sell our region to the world is to be known as the dumping ground for the UK’s nuclear waste”.

He also does not mention Hydrogen, which could have a genuine but limited application in replacing fossil fuels in high energy manufacturing and replacing some diesel trains on routes that are difficult to electrify; so long as it is manufactured in the right way. Current government plans do not envisage a wholesale switch from natural gas for domestic heating and cooking, despite some hype that they might and a campaign from the GMB that they should. This is being pushed by fossil fuel companies like BP and Equinor as a way to keep using otherwise stranded gas assets and infrastructure in production. Producing sufficient Hydrogen at scale would either require surplus renewable energy – like night time wind – generating it from water (Green Hydrogen) or an industrial process separating it from natural gas (methane) with carbon capture and storage (Blue Hydrogen). Studies in the US indicate that the production of Blue Hydrogen is more carbon intensive than gas or coal, with leakages of methane, and that doing so on the scale needed for viability in the UK would release 8 million tonnes of C02 a year. Industry hype, which is picked up and magnified in the Labour movement, that Blue Hydrogen is transitional to Green is cynical greenwash. There is also significant potential in District heating schemes, using surplus and otherwise wasted heat from disused coal mines, underground tunnels in the London tube and electricity network transformers owned by the National Grid.

Steel In 2019,UK Steel production was 7 million tonnes per annum. This has contracted by 34% since 1996 and compares with 94.5 million tonnes in the USA, 157 million tonnes in the EU and 996 million tonnes in China. The ownership of most of this capacity is split between Tata, in Port Talbot and Corby, and Jingye, and Liberty Steel in Scunthorpe. So, UK based steel production is quite small, specialises in specific products like reinforcing steel bars for construction, girders, mesh, hot rolled coil steel (for tools used at high temperature) rails and coated steel; and for the most part owned by Indian or Chinese companies. Liberty Steel is in difficulty because it was previously underwritten by Greensill Capital. A current rise in steel demand and prices and a shortage producing bottlenecks in some areas (like paint cans among others) is being driven primarily by economic growth in China; so, the retention and possible growth of the 33,000 jobs that remain in the industry in the UK depend partly on that in the immediate term. The current government projects a modest but real growth in realisable steel demand and production up to 2030 just by extrapolating current trends. At the moment “clean” steel is an aspiration, not a reality; as steel production is very carbon intensive. As it is also an essential material the reduction of its carbon intensity is urgent, while some offsetting is unavoidable to mop up the gap. In December last year the government held a consultation on how to progress towards it, focussed on switching to lower carbon fuels, including hydrogen; industrial carbon capture (ICC); and energy and material efficiency. This will need significant government investment to cover the cost. At present an almost token £250 million is earmarked for research on this sector. It would require a colossal level of investment to scale up the current UK based steel industry were it possible to ring fence the production of jackets and towers to local manufacturers beyond any level that the Conservatives, or Labour, would be prepared to contemplate.

This is the central flaw in the “Buy British” argument and applies in almost every manufacturing sector. Since containerisation in the 1970s cut the costs of shipping to negligible amounts, there has been little economic premium for capitalist companies to make things close to their most lucrative consumer markets. Before then, ships spent longer in port than at sea and costs were correspondingly high. Capital has shifted to where costs are lower. A government in a developed economy seeking import substitution – and presuming no retaliation elsewhere – would have to borrow and invest eye watering amounts both to create the capacity – investing in plant and infrastructure – and cover the difference in costs to get the same quantity of output. An example is CS Wind in Campbeltown. Projecting from their guaranteed price for their initial contract for jackets and towers for the Hornsey 1 wind farm, they touted £1000 a tonne to supply Hornsey 2. Their Vietnamese yard could do it for £400 a tonne, and got the contract. The difference had been made up in subsidy. So, to maintain local manufacturing capacity would require an investment two and a half times greater than importing – or get less than half the capacity for the same level of investment.

There is a countervailing argument that Labour could take up, which is concerned with setting contract conditions for the terms and conditions of the workers in the supplying companies; which could partly close this differential and help global levelling up. This would be a good thing in itself, but likely to be marginal in economic impact, as the differentiation between yards in labour costs in CS Wind’s case was just 5%.

So, that leaves a real problem.

The demand for a completely local supply chain is a reversion to a notion of national autarky, or, worse, the notion that “Global Britain” can stick with its imperial ways of helping itself to the rest of the globe’s resources while walling itself off from the consequences. A Just Transition has to be global to mean anything at all.

At the same time there are workers in industries in developed economies that are threatened with their current work having to go, and others that could transition to new products or sectors, who have relatively decent wages and social provisions that must be defended, so some local production is reasonable. The question is, how much and in what? Related to that is, what the priorities for government investment should be? Guaranteeing some part of the supply chain, based on existing jobs, with government investment linked to long term contracts, and either state owned or with a controlling share as payback, would be a step forward from the current system of giving private companies shed-loads of money in a series of one-off deals which may not be sustainable in the long term.

Notably absent from Starmer’s article is the largest single potential green job sector, which is in constructing and retrofitting buildings to reduce them to zero carbon emissions; thereby reducing energy demand and bills. These jobs, like the installation and maintenance of wind turbines, tidal power and solar arrays, can’t be off-shored. These are also the areas for investment that could have the greatest return in both jobs and reduced carbon emissions.

This has also been an area in which two Conservative initiatives have fallen flat – because they have tried to run them on a consumer led grant system that relies on property owners applying as individuals for work done by small private companies which – on the tiny scale that it worked – led to work being done in penny packets here and there; with people with the wherewithal, time and nous to make the applications being the prime beneficiaries of lower bills. The sort of thing that Lenin once described as “growing wheat in flower pots”. Labour needs to be clear that it will carry out this work through local authority direct labour to get maximum benefit from economies of scale, with the worst-off estates and people living in fuel poverty prioritised; with a national investment plan that also includes retooling the Further Education sector to train workers in the skills needed to do it.

Otherwise, it won’t happen.

This is a politically significant omission, as it is these jobs that could provide the backbone of a viable campaign to turn out this useless government. In its quest for a way forward, Stephen Kinnock’s “Renaissance” organisation report on winning back Labour voters who had defected to the Tories came back with a possibly unwelcome conclusion. The key issue is jobs. Flags are neither here nor there. Working up from the TUC and Green New Deal reports on the potential for green jobs in each area, alongside the Friends of the Earth report on the potential for green apprenticeships, would give a framework for campaigning in and outside elections that could have real traction if combined with an unremitting national campaign to put everything in the framework of the transition we need; which could also help jolt other opposition parties onto a similar track and force the government to concede ground to it.

The strategic obstacle to this is Starmer’s reluctance to actually challenge the government.

  1. See. Who holds the welding rod? James Meek. LRB