Brexit, shale gas and relaxed climate regulations could revitalise UK, says report
The UK’s manufacturing sector could thrive if freed from the “constraints” placed on it by the European Union and stringent climate change regulations according to a new report.
The ERA Foundation, which supports engineering skills development in the UK, believes that industry in Britain could be revitalised following Brexit.
“The EU structure and rules have tended to fix the UK’s position in the manufacturing hierarchy, constraining our freedom of action to regenerate industry, particularly if it threatened the pecking order,” the report states.
“The creation of conditions conducive to the resurgence of productive industry in the UK, free of earlier constraints, can be a prime target of Government in seeking to create a better-balanced and sustainable economy.”
Data from the Office for National Statistics shows that manufacturing is now worth less than 10 per cent of the UK’s GDP and that the trade deficit is growing.
The report states that without “appropriate vigorous action”, the manufacturing sector could decline even further, as it has faced significant challenges in the last decade partly from the 2008 Climate Change Act coupled with carbon taxes imposed by the EU.
The early closure of fossil-fuel power stations is also blamed for the increase in energy costs that have had a negative impact on industries such as aluminium producers in the UK.
Recent data showed that just six per cent of electrical energy used in the UK last spring was generated using coal, a sizable drop from the 20 per cent figure in 2015.
The ERA believes “corrective action” could be taken under the Department for Business, Energy & Industrial Strategy, which was only created last year, that could have an “immediate” positive impact on manufacturing.
One way to do this, the report states, is to embrace fracking technology which would ensure a “secure and cost-competitive energy supply for the foreseeable future” while simultaneously helping to reduce the UK’s carbon footprint in comparison to coal.
“Shale gas is, of course, a fossil fuel, but one with half the carbon dioxide (CO2) emissions of coal,” it states without acknowledging the relatively small role that coal now plays in the UK’s energy mix. “This can offer a pragmatic compromise between environmental concerns and the need to keep the lights on and maintain a viable national economy.”
Shale gas exploration has had a rocky start in the UK with significant local and national opposition. After a protracted period the Government finally approved a fracking permit to energy company Cuadrilla last October.
“In the USA the reduction in CO2 emissions has been almost solely due to shale gas and oil replacing coal. A reduced CO2 emission technology that is available now will be a valuable contributor toward an ideal of a zero-emission economy at some point in the future.”
The UK Government has recently rebutted claims that rising consumer energy bills are due to policies designed to lessen the impact of climate change and increase energy efficiency.