Claire Coutinho: The UK is hamstrung by the ‘Carbon Tax’ in the face of another global supply shock

Claire Coutinho is the MP for East Surrey and Shadow Secretary of State for Energy Security and Net Zero.

Last year we lost a third of our refineries.

That means we head into another global supply shock less able to make our own petrol, diesel and jet fuel and more reliant on imports from abroad. This is likely to cause us real difficulties in the weeks and months ahead.

Why?

The spiralling cost of the little-known Carbon Tax which has been hammering British business. Some refineries are now paying as much on the state-imposed Carbon Tax as on their own wage bill – and yet their competitors in the Middle East, the US and India do not face this extra cost at all.

And it’s not just refineries – our chemicals, plastics, cement, and ceramics industries are all struggling too. We are losing factories hand over fist, leaving Britain importing more goods with higher emissions from countries with lower environmental standards, all in the name of tackling climate change. This is mad.

That’s why last week the Conservatives announced one of our most important policies yet.

We pledged to axe the Carbon Tax entirely to save British industry. As the world gets more dangerous and the consumer gets more squeezed, we have to halt the deindustrialisation of Britain and cut bills.

The Carbon Tax charges a fee for every tonne of carbon produced, increasing the cost of using energy and effectively acting as a tax on the production of British goods. It has placed an immense burden on the shoulders of British industry.

The Carbon Tax regime, or ETS, was introduced by the European Union in 2005 and was intended to provide an incentive for British manufacturers to decarbonise with the assumption that countries around the world would follow suit and impose a Carbon Tax of their own. However, that simply has not happened – and instead the practical effect is that we are taxing our foundational industries out of existence.

And under Labour, the tax is set to soar. Some plants – like the Pembroke refinery that I visited in Wales recently – already face a Carbon Tax bill in the tens of millions each year, and over the next few years they expect that bill to double as Labour have chosen to surrender control of our Carbon Tax scheme to the EU.

I believe it’s a profoundly Conservative principle to protect the environment. However, we lost the cleanest ammonia factory in Europe because our energy prices and its Carbon Tax bill made it uncompetitive. The result? We now import it with higher emissions than if we made it here. Who is that helping?

We are losing the ability to make things in Britain. Deindustrialising our economy in the name of net zero is making us a warning, not an example, to the rest of the world.

Our industrial power is our hard power – it is the power we turn to in times of crisis or conflict. Whether it’s our refineries, or chemicals, or ceramics, these are critical industries for our national as well as our economic security.

Replacing British production with dirtier foreign imports in the name of our domestic Net Zero targets is lunacy. We must reject decarbonisation by deindustrialisation.

Nowhere has this been clearer than our fight to be able to use our own resources in the North Sea. Keir Starmer needs to put his ideological Energy Secretary back in his box and get Britain drilling again.

Ed Miliband says North Sea production can’t cut bills, but that is total nonsense. We can use the £25 billion of tax revenue the North Sea could generate to cut the green levies and taxes that he has been loading on to everyone’s energy bills. We use all of the gas drilled in the North Sea. Without it, we would just be more dependent on imports – again, with far higher emissions. It simply does not make sense.

Cheaper energy, competitive industry, and a Britain that is once again proud to use her own resources. That’s what a leader with a backbone would stand for.

Sadly, Starmer doesn’t have one – and he is far too happy to hide behind Ed Miliband’s cult-like convictions and the fantasy accounting created by the Climate Change Act.

We have to change course. The Conservatives would axe the Carbon Tax to save British industry, and we will Get Britain Drilling in the North Sea.

Our new Cheap Power Plan will cut household bills by an average of £200 and cut business electricity costs by 20%. If we want people to use electricity, then we need to make it cheap.

We are the only political party with a properly funded plan to cut bills and axe the Carbon Tax in its entirety – and we’re the only political party that has written the legislation needed to open up the North Sea. Our plan is better for the economy, better for our security and better for the environment too.

It’s time to make the most of our own, to save British industry, and to get Britain working again.