Up to 660,000 jobs – many in the UK’s industrial heartlands – are at risk unless Boris Johnson speeds up green investment and moving to “net zero” carbon dioxide emissions, according to a major study.
Many of the areas where jobs are most under threat include the “red wall” constituencies won by the Conservatives from Labour at the last election, and the unemployment threat will worry Tory MPs from these areas.
The warning comes in analysis by the TUC as it begins a three-day conference and just weeks before the Prime Minister welcomes world leaders including President Biden to the COP26 climate change summit in Glasgow.
Besides climate change, being debated on day one, the TUC’s part-virtual conference at its London HQ will be dominated by protecting jobs post-COVID, opposition to last week’s national insurance hike and the planned £20 universal credit cut next month.
Spelling out the jobs warning, general secretary Frances O’Grady, who speaks in person on day two of the conference, declared: “The world is moving very clearly in one direction – away from carbon and toward net zero. The UK must keep up with the pace of change.
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“There’s still time to protect vital jobs in manufacturing and its supply chains. But the clock is ticking.
“Unless the government urgently scales up investment in green tech and industry, we risk losing hundreds of thousands of decent jobs to competitor nations.
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“If we move quickly, we can still safeguard Britain’s industrial heartlands. The government should boost investment to at least the G7 average and commit to the Green Jobs Taskforce plans in full.
“Then today’s workers will know that their jobs are safe, and the future can be bright with decent jobs for their children too.”
Image: Sir Keir Starmer will address the conference in person on Tuesday
The Labour leader Sir Keir Starmer will address the conference in person on Tuesday, in what is likely to be a dress rehearsal for his Labour conference speech in Brighton two weeks later, which critics claim will be make-or-break for his leadership.
The conference will also see the public debut of new Unite general secretary Sharon Graham, elected last month, who is also due to speak on Tuesday, in support of a TUC motion demanding an end to “fire and rehire” by employers.
The TUC’s job losses analysis is based on data from the Office of National Statistics and researchers Catapult Energy Systems, a company funded by the government through Innovate UK, the UK’s innovation agency.
The unions want the government to implement recommendations in a report in July by its Green Jobs Taskforce, chaired by Business Secretary Kwasi Kwarteng, and launch an £85bn green recovery package to create 1.24 million green jobs.
The TUC claims that unless the government acts now nearly 260,000 manufacturing jobs and more than 400,000 in supply chains could be moved offshore to countries that offer superior green infrastructure and greater support for decarbonising industry.
According to a TUC report in June, the UK Treasury is investing £180 per person on green recovery and jobs over the next decade, compared to President Biden planning £2,960 per person on green recovery, jobs and programmes like public transport, electric vehicles and energy efficiency.
Image: Hundreds of thousands of people face unemployment, the TUC has warned
The industries facing the biggest job losses, according to the TUC analysis, are:
• Rubber and plastics: nearly 80,000 jobs; • Chemicals: 63,000; • Glass and ceramics: more than 40,000; • Iron and steel: nearly 27,000; • Textiles: 18,000; • Paper, pulp and printing: 15,500.
Supply chain jobs threatened include those in construction, producing and maintaining industrial machinery, transport, and trade, bringing the total number of jobs at risk to 660,000, according to the TUC.
The TUC also claims workers in the UK’s industrial heartlands are particularly at risk, with nearly 40,000 under threat in North West England, nearly 37,000 in Yorkshire and the Humber and more than 30,000 in the West Midlands.
According to the TUC,jobs in the steel industry are at a high risk because manufacturing is currently dependent on burning coal for high temperatures required to produce high-grade steel.
Alan Coombs, who has worked at Port Talbot steelworks for 40 years, said: “Companies overseas are already setting target dates for green steel. But the UK isn’t even putting our toe in the water.
“We have families here who are third or fourth generation working at the plant. If we don’t have apprenticeships in green steel technology soon, there won’t be another generation.
“If we put ourselves at forefront of green innovation, we can protect the workforce. But it needs government action.”
Donald Trump’s trade war escalation has sparked a global sell-off, with US stock markets seeing the biggest declines in a hit to values estimated above $2trn.
Tech and retail shares were among those worst hit when Wall Street opened for business, following on from a flight from risk across both Asia and Europe earlier in the day.
Analysis by the investment platform AJ Bell put the value of the peak losses among major indices at $2.2trn (£1.7trn).
The tech-focused Nasdaq Composite was down 5.8%, the S&P 500 by 4.3% and the Dow Jones Industrial Average by just under 4% at the height of the declines. It left all three on course for their worst one-day losses since at least September 2022 though the sell-off later eased back slightly.
Analysts said the focus in the US was largely on the impact that the expanded tariff regime will have on the domestic economy but also effects on global sales given widespread anger abroad among the more than 180 nations and territories hit by reciprocal tariffs on Mr Trump‘s self-styled “liberation day”.
They are set to take effect next week, with tariffs on all car, steel and aluminium imports already in effect.
Price rises are a certainty in the world’s largest economy as the president’s additional tariffs kick in, with those charges expected to be passed on down supply chains to the end user.
The White House believes its tariffs regime will force employers to build factories and hire workers in the US to escape the charges.
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The latest numbers on tariffs
Economists warn the additional costs will add upward pressure to US inflation and potentially choke demand and hiring, ricking a slide towards recession.
Apple was among the biggest losers in cash terms in Thursday’s trading as its shares fell by almost 9%, leaving it on track for its worst daily performance since the start of the COVID pandemic.
Concerns among shareholders were said to include the prospects for US price hikes when its products are shipped to the US from Asia.
Other losers included Tesla, down by almost 6% and Nvidia down by more than 6%.
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PM: It’s ‘a new era’ for trade and economy
Many retail stocks including those for Target and Footlocker lost more than 10% of their respective market values.
The European Union is expected to retaliate in a bid to put pressure on the US to back down.
The prospect of a tit-for-tat trade war saw the CAC 40 in France and German DAX fall by more than 3.4% and 3% respectively.
The FTSE 100, which is internationally focused, was 1.6% lower by the close – a three-month low.
Financial stocks were worst hit with Asia-focused Standard Chartered bank enduring the worst fall in percentage terms of 13%, followed closely by its larger rival HSBC.
Among the stocks seeing big declines were those for big energy as oil Brent crude costs fell back by 6% to $70 due to expectations a trade war will hurt demand.
The more domestically relevant FTSE 250 was 2.2% lower.
A weakening dollar saw the pound briefly hit a six-month high against the US currency at $1.32.
There was a rush for safe haven gold earlier in the day as a new record high was struck though it was later trading down.
Sean Sun, portfolio manager at Thornburg Investment Management, said of the state of play: “Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade.”
He warned there was a big risk of escalation ahead through countermeasures against the US.
Sandra Ebner, senior economist at Union Investment, said: “We assume that the tariffs will not remain in place in the announced range, but will instead be a starting point for further negotiations.
“Trump has set a maximum demand from which the level of tariffs should decrease”.
She added: “Since the measures would not affect all regions and sectors equally, there will be winners and losers as in 2018 – although the losers are more likely to be in the EU than in North America.
“To protect companies in Europe from the effects of tariffs, the EU should not respond with high counter-tariffs. In any case, their impact in the US is not likely to be significant. It would be more efficient to provide targeted support to EU companies in the form of investment and stimulus.”
British companies and business groups have expressed alarm over President Donald Trump’s 10% tariff on UK goods entering the US – but cautioned against retaliatory measures.
It comes as Business Secretary Jonathan Reynolds launched a consultation with firms on taxes the UK could implement in response to the new levies.
A 400-page list of 8,000 US goods that could be targeted by UK tariffs has been published, including items like whiskey and jeans.
On so-called “Liberation Day”, Mr Trump announced UK goods entering the US will be subject to a 10% tax while cars will be slapped with a 25% levy.
The government’s handling of tariff negotiations with the US to date has been praised by representative and industry bodies as being “cool” and “calm” – and they urged ministers to continue that approach by not retaliating.
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The latest numbers on tariffs
Business lobby group the CBI (Confederation of British Industry) said: “Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices”.
Industry body the British Retail Consortium (BRC) also cautioned: “Retaliatory tariffs should only be a last resort”.
‘Deeply troubling’
While a major category of exports, in the form of services – like finance and information technology (IT) – has been exempted from the tariffs, the impact on UK business is expected to be significant.
Mr Trump’s announcement was described as “deeply troubling for businesses” by the CBI’s chief executive Rain Newton-Smith.
The Federation of Small Businesses (FSB) also said the tariffs were “a major blow” to small and medium companies (SMEs), as 59% of small UK exporters sell to the US. It called for emergency government aid to help those affected.
“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,” the FSB’s policy chair Tina McKenzie said. “The fallout will stifle growth” and “hurt opportunities”, she added.
Companies will need to adapt and overcome, the British Export Association said, but added: “Unfortunately adaptation will come at a cost that not all businesses will be able to bear.”
Watch dealer and component seller Darren Townend told Sky News the 10% hit would be “painful” as “people will buy less”.
“I am a fan of Trump, but this is nuts,” he said. “I expect some bad months ahead.”
Industry body Make UK said the 25% tariffs on cars, steel and aluminium would in particular be devastating for UK manufacturing.
Cars hard hit
Carmakers are among the biggest losers from the world trade order reshuffle.
Auto industry body the Society of Motor Manufacturers and Traders (SMMT) said the taxes were “deeply disappointing and potentially damaging measure”.
“These tariff costs cannot be absorbed by manufacturers”, SMMT chief executive Mike Hawes said. “UK producers may have to review output in the face of constrained demand”.
The new taxes on cars took effect on Thursday morning, while the measures impacting car parts are due to come in on 3 May.
Economists immediately started scratching their heads when Donald Trump raised his tariffs placard in the Rose Garden on Wednesday.
On that list he detailed the rate the US believes it is being charged by each country, along with its response: A reciprocal tariff at half that rate.
So, take China for example. Donald Trump said his team had run the numbers and the world’s second-largest economy was implementing an effective tariff of 67% on US imports. The US is responding with 34%.
How did he come up with that 67%? This is where things get a bit murky. The US claims it studied its trading relationship with individual countries, examining non-tariff barriers as well as tariff barriers. That includes, for example, regulations that make it difficult for US exporters.
However, the actual methodology appears to be far cruder. Instead of responding to individual countries’ trade barriers, Trump is attacking those enjoying large trade surpluses with the US.
A formula released by the US trade representative laid this bare. It took the US’s trade deficit in goods with each country and divided that by imports from that country. That figure was then divided by two.
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So, in the case of China, which has a trade surplus of $295bn on total US exports of $438bn, that gives a ratio of 68%. The US divided that by two, giving a reciprocal tariff of 34%.
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PM will ‘fight’ for deal with US
This is a blunt measure which targets big importers to the US, irrespective of the trade barriers they have erected. This is all part of Donald Trump’s efforts to shrink the country’s deficit – although it’s US consumers who will end up paying the price.
But what about the small number of countries where the US has a trade surplus? Shouldn’t they actually be benefiting from all of this?
That includes the UK, with whom the US has a surplus (by its own calculations) of $12bn. By its own reciprocal tariff formula, the UK should be benefitting from a “negative tariff” of 9%.
Instead, it has been hit by a 10% baseline tariff. Number 10 may be breathing a sigh of relief – the US could, after all, have gone after us for our 20% VAT rate on imports, which it takes issue with – but, by Trump’s own measure, we haven’t got off as lightly as we should have.