Manufacturing sector savages Darling claim that Labour supports green jobs

EEF says 90% of £2bn earmarked for London Array wind farm is being spent abroad
Terry Macalister
guardian.co.uk, Sunday 3 January 2010 15.39 GMT
The manufacturing sector has savaged suggestions from the chancellor, Alistair Darling, that Britain is benefiting from government support for a "green" jobs revolution, warning that the UK was instead in danger of "missing the boat".
The industry body, the EEF, points out that over 90% of the €2bn earmarked for the world's biggest wind farm in UK waters – the London Array, off Kent – is being spent abroad and ministers must take some of the blame.
"In Germany you get government sitting down with business and saying, this is what the targets are for renewable energy and what do you need to provide the kind of necessary capacity," said the EEF's head of climate change and environment policy, Gareth Stace. "Lord Mandelson [the business secretary] has brought a sense of urgency, but it still requires a different mindset to push the boundaries of state aid like other countries do. We have missed the boat on onshore wind and risk doing the same offshore," he added.
E.ON and the other investors in the London Array have just finalised a €2bn contract bonanza for suppliers, but the German power company confirmed that all but €180m of the work was being spent outside of Britain, largely because there were no suitable local suppliers.
The setback follows the decision by the leading turbine maker Vestas to shut its Isle of Wight turbine factory this summer, just days after the government promised a clean-tech job revolution.
Yet Darling wrote in the Guardian on 30 December that government action meant that 500,000 jobs would be created around the clean energy sector. "By addressing investment barriers we've released billions of pounds for offshore wind, ultra low-carbon vehicles, marine energy and low-carbon aerospace. Green industries alone could support a further half a million jobs over the next decade. None of this would happen without support," he said.
Around £500m is being spent on turbines for the London Array, but the propellers are going to be built by Siemens Wind Power at its factory in Denmark.
The bulk of the €180m that is being spent in Britain is also going to Siemens, to build two offshore electrical substations and one onshore one. Siemens is a German company, but that work will be done through its Manchester-based subsidiary, Siemens Transmission and Distribution. The only other significant contract for Britain is for some transmission links from JDR Cable Systems, a UK subsidiary of a larger group based in Houston, Texas.
The British Wind Energy Association (BWEA) said the lack of real local content highlighted the need for the UK to build up its indigenous industrial capacity as soon as possible. "Huge efforts are being made by government to attract manufacturing to the UK and we wholeheartedly endorse that, but the London Array shows the sooner we manage to do this the better," a BWEA spokesman said. "We are starting from a very low base, or pretty much non-existent one, when it comes to turbines."
E.ON, one of the three main backers of the 630-megawatt London Array, along with Dong of Denmark and Masdar of Abu Dhabi, said all €2bn worth of contracts went out to competitive tendering. "We estimate that €180m of that went to local companies, but unfortunately there were not more British companies in the running," an E.ON spokesman said.
He added that the enormous project – set to open in 2012 – would provide plenty of work in the home market, giving as an example the 45 jobs which would be created at the port of Ramsgate, the main logistics base for the London Array.
Siemens unveiled plans to set up a wind power research centre at Sheffield University, but continues to dither over whether it is prepared to construct a turbine manufacturing plant in the UK. The head of Siemens held talks with Gordon Brown in October, but the German firm declined to say whether it was any closer to making a final decision to invest here or abroad.
Mitsubishi of Japan and General Electric of the US have also been considering whether to build an assembly plant here, while the government has given a grant to the US-based firm Clipper Windpower to build a prototype mega-blade for UK deep water windfarms in Hartlepool.
A spokesman for Mandelson's department of business, innovation and skills, said it was "unfair" to judge the wider low carbon industry on the back of the London Array, which is only one project.
"British companies are successfully competing for work on schemes around the world such as the Masdar city project in Abu Dhabi," the spokesman said. "The government has unveiled a range of new initiatives, such as support for the Dalton Nuclear Institute in Manchester and the Nuclear Advanced Manufacturing Research Centre in Rotherham."