High energy prices are crippling British industry

Britain’s economy is almost flatlining, having grown just 0.1 per cent in November following two months of shrinking.

- HOWARD MUSTOE

While most sectors of the economy grew, such as construction and services including retail and hospitality, production slumped by 0.4 per cent, led by a fall in manufacturing, according to the Office for National Statistics (ONS).

The production of pharmaceutical products, paper, machinery and food products all fell, adding to the decline, according to the figures.

Rising energy prices and other high costs have made the UK uncompetitive for factories and industry has been shrinking slowly for some time. Between 1960 and 2015, manufacturing employment in the UK fell by more than 0.4 per cent per year, according to the International Monetary Fund (IMF).

But there have been recent signs too. Today’s news comes days after a warning from Britain’s top industrialist and one of the country’s richest people, Sir Jim Ratcliffe, chair of Ineos, who said chemical manufacturing in the UK is facing “extinction”.

Sir Jim spoke after Ineos last week closed the last remaining synthetic ethanol plant in the UK; the chemical is used in medicine and cosmetics.

He said: “We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”

Ineos said 10 large chemical plants in the UK have closed in the last five years with no new sites to replace them.

A key issue is energy prices, said Sharon Todd, chief executive of SCI, a charity founded in the Victorian era to bring innovation and scientific developments to Britain’s once-mighty industrial sector.