Friday, 10 September 2010

Albert Owen distorts reality over Anglesey Aluminium closure again

Yesterday it was announced that Anglesey Aluminium will officially commence decommissioning the holyhead plant meaning that aluminium smelting will never again return to Anglesey. In response to this bad news, Albert Owen MP has popped up to once again to apportion blame for the plant's closure on anyone other than his own Labour government. Previously Albert has blamed "Conservative hypocrisy" for its closure, this time he lays the blame squarely on Anglesey Aluminium itself, saying "If the company was serious about continuing to smelter it would have taken up the generous government offer in 2009 to help bridge the gap over a difficult economic period".

Just as Albert never tires in peddling these blame-avoiding half truths, the Druid never tires in setting the record straight here. 

The UK's declining energy capacity
compared to rising peak demand levels
(Source: The Economist)
Anglesey Aluminium was forced to close because it used to consume daily 12% of Wales' total electricity and therefore depended on a cut-price electricity deal with the nearby Wylfa nuclear power station. Now, It was clear for years that the Wylfa reactor - which has been producing electricity since 1971 - would need to be decommissioned around this time, and when that happened the economic viability of Anglesey Aluminium would be severely compromised unless a new reactor was already in place at Wylfa. Unfortunately, as we all know, the previous Labour government's obsession with 'renewable energy' and expanding the proliferation of windmills across the country led it to take its eye of the ball of preserving our essential power supplies. The fact is that most nuclear plants (including the current Wylfa reactor) and half of UK's coal plants are due to close over the coming decade and the Labour government had no concrete plan on how to replace them. The Department of Energy and Climate Change itself estimated last year that, of a total of around 75GW in generating capacity, 20GW will disappear by 2015. And as the current peak demand is around 65GW and growing, that means that the UK could be facing energy blackouts by as soon as 2015.

Anyway, as the current Wylfa reactor inevitably neared the end of its working life, it was acquired by the Government's Nuclear Decommissioning Authority (NDA) to be decommissioned. Now essentially government owned, the NDA's lawyers had to inform Anglesey Aluminium that Wylfa would no longer be able to supply it with the cut-price electricity on which it depended as that would constitute 'state aid' under EU law. Indeed, this was made clear by the NDA in January 2009 when its spokesman said this:

"There’s been no breakdown in the relationship between ourselves and Anglesey Aluminium but we have explained to them the situation. We cannot extend the current contract with them due to new European legislation on providing subsidies to private companies.”

Furthermore, Anglesey Aluminium was anyway sensing difficulties ahead due to the then Labour government's pledge to reduce UK carbon emissions by a staggering 80% by 2050 (incidentally this pledge was made by Ed Milliband - the very man Albert Owen is now backing to become Labour leader). To meet these goals, the EU has introduced a carbon trading scheme - an administrative approach to control pollution (in the shape of 'carbon') by providing economic benefits to companies for achieving reductions in the emissions of carbon. During a debate about the closure of Anglesey Aluminium in the Houses of Parliament, Robert Goodwill MP, the then shadow transport secretary, had this to say about the EU scheme:

"is not the fundamental problem the operation of the European Union emissions trading system, which is making it increasingly difficult for primary metallurgical industries to operate in the EU? It would be all well and good if it resulted in the reduction of global CO2, but it merely results in carbon leakage to other economies such as China and India, which are not constrained in the same way."

Exactly right, and precisely what happened in the case of Anglesey Aluminium - many of whose managers were headhunted to work at Dubai's new state-of-the-art aluminium smelter, operating safely outside the EU's emissions trading system. The simple fact is that charging for carbon adds yet another layer of anti-competitiveness for already struggling heavy industries operating within the UK or Europe.

Due to this 'double whammy' affecting its future viability, is it any surprise that Anglesey Aluminium -without a secure supply of cheap energy - decided to turn down a pre-election bribe of £48m from a panicking Labour government eagerly trying to paper over the cracks of its incompetence and lack of foresight in the field of Energy Policy? 

Bonus Extra: If you need any more persuasion then please read this blogpost where I explain how both the Corus Steelworks in Teeside and Anglesey Aluminium died of the same causes.

32 comments:

The Red Flag said...

"If the company was serious about continuing to smelter it would have taken up the generous government offer in 2009 to help bridge the gap over a difficult economic period".

If the Labour Government were serious about keeping Anglsey Aluminium in production then it's own Business Secretary who before that was on the European Commission - would not have supported RusAl's Oleg Deripaska in it's succesful bid to have it's tariffs removed from imports into the EU. Mandelson, back in December 2005, signed off the decision to remove the 14.9% tariff from RusAls Aluminium foil, and that was ratified by the EU Council Of Ministers in Jan 2006. From that moment onwards Anglesey Aluminium was scuppered unless it drmatically slashed costs. RTZ knew it hence the plants in Brasil and eastern europe, the government knew it, the WAG knew it and Albert Owen also knew it. My only two surprises are firstly that he has yet to blame the Tories or Plaid and secondly the people of Holyhead seem unable to grasp the significance of what Mandelson's little favour for his mate Oleg has actually cost them.

For him to think there was a way of keeping that plant open is 'disingenious' to say the least. The energy problem was something that could have been sorted (in fact should have been a decade ago), but once the Russians were given the access to the EU market then even free energy wouldn't have stopped the closure.

The Druid of Anglesey said...

Red flag - well put. Incidentally, I wrote about the Mandelson/Deripaska tariff issue in second ever Druid post: http://druidsrevenge.blogspot.com/2010/01/what-was-real-reason-for-closure-of.html

mozilla said...

Oh please, this is a global economy, and the reality was that aluminium could be produced cheaper elsewhere. Even taking into account possible state subsidy.

Did you really believe what any politician says to you?

And how how many jobs have been lost to pay for the money we gave the failing banks?

The Red Flag said...

Very interesting Druid - and that refers to a different tariff to that which I refer which shows just how much of a near-impossibility AAs future was.

Anonymous said...

mozilla

Enlighten us. How many?

Whilst you're at it enlighten us how much money was actually paid to these banks(in % terms of the whole defecit) as opposed to guarantees.
And, of the money paid, how much will we get back and at what profit.

I'd like to know.Do enlighten me.

mozilla said...

Anon you seem to miss the point - the collapse of the banking system only saved by intervention of governments has resulted in thousands of jobs being lost - however in reality this is only a symptom of the current economic system, boom and bust, the only difference the banks went bust first.

Bob Diamond (of Barclay's) will be paid £11,000,000 and we say the Prime Ministers pay of £165,000 is the benchmark

Anonymous said...

Mozilla

How much did it cost us to bail out Barclays?
Are they in public ownership?

The Druid of Anglesey said...

Mozilla - the renumeration of Barclay's Bob Diamond is a matter for Barclay's shareholders. Barclays refused to take any public money during the credit crunch crisis and instead sought extra funding from private investors the Middle East. You might argue that Barclays was anyway only kept afloat because the Government's actions stabilised the entire banking industry - but you don't seem to be making that argument. Anyway, as Barclay is in no way state owned, it is irrelevant how much more their CEO is paid than the PM.

The Red Flag said...

I think HSBC took no government money either along with several others. Precisely so that the government could never put pressure on them.

mozilla said...

Um this thread is about Albert Owen, and why somehow he missed all the signals the Smelter plant would never reopen.

Lessons - never take anything any politician says for granted...

Anonymous said...

A starter for 10: which Holyhead Labour Councillors suggested in the mid-1980s that the AA stack was spewing dangerous gasses into the atmosphere and called for an investigation into it?

TGC said...

"this is a global economy, and the reality was that aluminium could be produced cheaper elsewhere."

That's absolutely right. I think it's fair to say Druid is pro-nuclear and pro-business. That makes the arguments rather less than balanced.

It's always made much more sense - and sensible people still argue for this - that processes should be set-up where it is suitable to do so. Metal production? Set up where there is plentiful cheap energy. Visit Iceland and you'll see some of the largest, newest Aluminium producers already taking the benefits of geothermally-produced electricity. Norway used to make use of hydro schemes for fertiliser production.

Only in the highly distorted energy market set-ups, including the massively-subsidised nuclear sector, could something like Anglesey Aluminium have existed on the island at all, let alone for that long. If you take all the scaffolding of state subsidies and hidden economics away, you soon reveal just how much each tax payer is propping-up jobs in unsustainable industries.

Anonymous said...

It's sad news but when it was built it had a shelf life (of I believe 30 years) it over-ran that by 10 years or more so the writing was on the wall, however something should have been done to replace the industry because everyone knew it's days were numbered

mozilla said...

According to Wikipedia in 2006 the world production of Aluminium was 33,410,000 tonnes of which the UK produced just above 1%. China being the biggest produced with 18%. So in terms of the global economy and new production facilities that have come online since then UK production not really significant was it?

see http://en.wikipedia.org/wiki/List_of_countries_by_aluminium_production

Anonymous said...

Lynn Ball and Clive McGregor truly exposed
See Ynysmon.com

The Red Flag said...

mozilla then UK production not really significant was it? That is a s pig-ignorant as it is arrogant. The Holyhead production was bloody vital to Anglesey. You prattled on earlier about globalism neatly side-stepping the fact that the EU routinely puts tariffs in place to preserve industries within the EU and it was the interference of Mandelson that had that tariff removed.

You cannot be globalist and also pro-EU (you can't even be 'internationalist'). The two are mutually exclusive becaue of the EU tariff system and also internal EU zonal ring-fencing and things like CAP.

mozilla said...

Red Flag said "That is a s pig-ignorant as it is arrogant" - what the fact that in 2006 that the total production of Aluminium in the UK only amounted to 1% of total world production.

The truth though, the pig ignorant truth, as it is arrogant. Which by the way when has quoting some home truths become arrogant, oh well there a first time for everything.

Anonymous said...

Druid, your credibility is going down the toilet as your pro-Tory obsession takes over. The wonder of AAM is that it ever existed.

Its life span was limited to the agreement which was to run with the planned life of WYLFA A and was not automatically going to extend to Wylfa B.

Anglesey has been blessed with a period of high-ish employment as a result of Wylfa and AAM. It's over.

The tories don't give a fig for us and it's to be hoped never win this seat again.

The Druid of Anglesey said...

Anon 20:43

"Its life span was limited to the agreement which was to run with the planned life of WYLFA A and was not automatically going to extend to Wylfa B."

Well it certainly couldn't be extended if Wylfa B didn't exist, could it?

"Anglesey has been blessed with a period of high-ish employment as a result of Wylfa and AAM. It's over."

Take note readers: this is the official Labour line on jobs on Anglesey. Its all just fate - nothing to do with decisions (or lack of decisions) made by the Labour government at all.

"The tories don't give a fig for us and it's to be hoped never win this seat again."

Translation: if I keep calling the Tories "evil" perhaps people will keep voting Labour despite the incompetence and constant lies.

Anonymous said...

I sent you a top bit of writing about Rio Tinto aka Anglesey Aluminium why wasn't it posted.

The Druid of Anglesey said...

Anon 21:00 - I'm afraid I haven't seen or deleted anything. Can you re-post?

The Red Flag said...

mozilla, the UK's alunminium production levels is not the issue. Nor is globalisation while we are an EU member state.

The issue is the impact the closure has had on the economy of Anglesey, and whether that closure could have been avoided if Mandelson hadn't interferred with the tariffs levied on non-EU importers and if succesive governments had bothered their arses planning a startegic energy policy.

Can you not follow that?

Puck said...

On the subject of elected members:

http://www.bbc.co.uk/news/uk-wales-politics-11252827

'Plaid leader Ieuan Wyn Jones wants to be first minister'

Mr Jones said "Managing Wales may be what other parties are about, but for Plaid putting up with things as they are, just doesn't feel right ... I didn't come into politics to manage Wales. I came into politics because I wanted to change Wales, and change Wales for the better".

It would good to see this in action nearer to home, unless of course Mr Jones's intent is make the rest of Wales more like Ynys Mon.

Anonymous said...

Ieuan Wyn Jones wants to be first minister after next years election does he? After condoning such breaches of the Human Rights Act by his plaid group here on Anglesey where he suppose to be our AM, he'll be lucky to get re-elected never mind become first minister.

Anonymous said...

Rio Tinto aka Anglesey Aluminium was one of the biggest employers on Anglesey, we were fortunate, the ore was shipped in,shovelled in one end of the factory, processed and out of the other end came Aluminium.

Times were great, to work there was a job that created a lot of economic stability. Men worked there to get a WAGE, this was called MONEY, this was spent locally in pubs, shops and the standard of living for the people who worked there was high.

Along came the village idiot, he stuck his nose in and started interferring, pollution, noise, traffic, you name it, he was up in arms against it. People knew that he was a stirrer, eventually the village idiot was elected as the local MP, then a dark cloud descended over Anglesey Aluminium, as well as the whole of Anglesey.

The village idiot stuck his nose in everywhere, every place he went he caused havoc. People went up to him for help and pleaded with him to save their jobs and to stop being such a cretin, their pleas went unheeded, his ears as well as his brain was switched off.
Now, instead of economic boom, we have nothing, instead of people working we have mass umemployment, instead of investment in our people and Island we have desolation, ruin and an economic decline on this Island that has never been witnessed before.

If he hadn't had been so quick to interfere, and instead had offered the hand of help and assistance we would not see Rio Tinto aka Anglesey Alumnium boarded up and closed. I blame him, for interferring, for being arrogant, stupid and for betraying us all,let's all raise our drinks and say well done Albert Owen, the village idiot of Anglesey who will be remembered for betraying the workers of Anglesey and creating a generation lost. Well done Albert, well done Labour.

Anonymous said...

Ieuan Wyn Jones, the balloon king.

Did you send Huw Terry the druids penny?

Anonymous said...

If you want to stop Ieuan Wyn Jones being first minister of Wales, the best way is to start here, write what you want, when you want, let's see him read the postings about him being unwanted, unwelcome and unwashed.

The Red Flag said...

anon 21:26 - Pretty fair comment bud.

Anonymous said...

Dear Druid

With Ieuan Wyn jones bragging today, how he wants to manage Wales as the next First Minister, and the disgraceful conduct of Plaid Cymru on Anglesey do you think we could make a new heading where we can write about things he has failed us on? For example, we are all concerned about the failings of Plaid Cymru to look after the basic rights of the people of Anglesey and how they stand by and do NOTHING to support the Island as a whole during these turbelant times.

We need to know how we can provide a true picture of the activities of Plaid Cymru and Ieuan, his political interferrance in our lives and how, together we can bring about change in Wales by removing him from public office.

Anonymous said...

Takle him on his lack of concern for Human Rights. that will do for a start.

Anonymous said...

Plaid Cymru ignores the Human Rights Act, for years they have treated the people of Anglesey as sub human.

Tom said...

Reducing carbon emissions would be easy if people recycled plastic products and stopped driving gas guzzlers. Also, nuclear energy should be greatly expanded.