So Rishi Sunak delivers grandiloquent speeches at Cop27 when he only went because of pressure, particularly from some Tory MPs. I want to give them thanks. Perhaps he will now turn his attention to an environmental project in his own backyard, notably the proposed Britishvolt factory at Blyth.
All over the world there is a rush to build factories to build batteries for electric vehicles as part of the transition to a green economy. The Faraday Institution, a government-funded think tank, counts 41 projects in Western Europe that are either planned or operational. Three of these are in Britain. There is the highly successful Envision plant at Sunderland which supplies Nissan, and has been going since 2012. It is planning a much larger second factory which would take its total workforce from 440 to 4,400, and produce 600,000 batteries a year. The third one is Britishvolt at Blyth which so far has not got off the drawing board.
Britishvolt
After a successful start, it looks as if Britain will fall behind in becoming a leader in developing the green economy. The government promised to back the Blyth factory provided that enough private investment was forthcoming. At the moment the situation is critical with the owners trying to secure the funds. Kemi Badenoch seemed very reluctant to make any concrete promises when she visited the North East last week. So much for the promises from Boris Johnson’s time of making Britain a world leader in developing the green economy.
One of the problems the Blyth project has is lack of potential orders. To be fair to the government it is unwise to commit public money to something which is likely to fail. They probably remember the Siemens factory in North Tyneside, which opened in 1998 with great fanfare to produce semiconductors. But they were unable to make them competitively there, and two years later Siemens sold the project to Atmel who finally closed it. To be fair, both Siemens and Atmel paid government grants back, but the original ambition of providing hi-tech jobs in the North East did not come to fruition.
What should the government do?
So what should government do? Abandoning the Blyth project is not an option, with Rishi Sunak talking up our green credentials, and the UK in danger of falling behind in the race to produce new green technologies. The situation is different from that of the Siemens plant. New forms of chips were developed more competitively by other countries, notably China and Japan. Now it is recognised all over the world that petrol and diesel-fuelled vehicles are major polluters, and there needs to be a switch to other forms of power for vehicles. An incidental benefit would also be a reduction of the power of nasty regimes that supply oil such as Saudi Arabia and Russia.
Sales of electric and hybrid vehicles in this country are increasing. 16% of the new cars sold this year are electric or hybrid, and the total has increased by 74% since 2020. What inhibits many purchasers, however, is the availability of charging points, and the ability to charge a car quickly. People going on a long journey do not want to have to stay in Travelodge overnight while their car charges up, however attractive the facilities may be.
Progress is being made with installing chargers in more remote areas, and I know the North East Combined Authority is funding this. Supermarkets too need to be encouraged to put them on their forecourts, as many already do. This is where the government needs to put its efforts and resources, developing more efficient chargers, and rolling out a programme of installing them across the country. This would be a more efficient use of public money than investing in factories if the private sector is willing to do so. Stimulating the market in a targeted way like this is a very effective way of encouraging a switch to green technology. This is the way to create sustainable green growth, targeted interventions, rather than the Truss theory of reducing tax for your rich friends and hoping they will invest the money they make in green technologies. If they want to increase their immediate return it is more likely they will choose a hedge fund or buy property.
I accept that such a programme of developing a green economy will take time, and there is an immediate problem with the British Volt factory. Some form of intervention may be necessary, such as government guarantees for loans and investments, but in the long term the way forward is to stimulate the demand for their product. It was government intervention in the market which stopped the use of leaded petrol. Public money must be used wisely, and this is the way to do it.
I hope Rishi Sunak’s enthusiasm for slowing down global warming is genuine, and not just a manoeuvre to make his position more secure. Announcing a programme to improve the infrastructure for electric vehicles will encourage investors in projects such as British Volt, but will also help develop the economy of the North East. The new factory will have spin-offs and encourage others to invest here. If we are going to move to a green economy, the focal point and leadership of it should be here in the North East.
