Yesterday I met a senior DESNZ type who was a bit miffed that there'd been very little coverage of this announcement from January -
UK invests in high-tech nuclear fuel to push Putin out of global energy market: £300 million UK investment to support domestic production of fuel required to power next-generation nuclear reactors. First European country to launch high-assay low enriched uranium (HALEU) programme ... Investment will end Russia’s reign as the only commercial producer of HALEU. The UK will become the first country in Europe to launch a high-tech HALEU nuclear fuel programme, strengthening supply for new nuclear projects and driving Putin further out of global energy markets.
That's the DESNZ press release header, incidentally. Setting aside the Putin-baiting, tabloid-style punchline - they really were trying for media coverage, but that stuff never works - this is one of those very rare beasts, an actually strategic government measure.
Well, I certainly missed this in Jan. On further investigation, it turns out the French are doing something similar, and the USA started last year. Over the past two years we've had the occasional BTL comment on the need for this. Quite refreshing when governments take logical actions, even if belatedly.
Now, where's my shopping list ..?
ND
17 comments:
Reassuring that The Powers That Be have (perhaps belatedly) recognised — and put their money in where required — that the world is no longer (if it ever was) like some kind of giant Amazon website and whatever you needed, whenever you needed it, could simply be procured from someone, somewhere. And that there’d always be a friendly someone, somewhere, to send you what you wanted.
Nearshoring, friendshoring, reshoring — call it what you will — will, in my humble opinion, profoundly reshape trade flows and economic activity over the coming decades.
And £50m will be spunked to protect the little fishy-wishies at Hinckley. No wonder nuclear is so expensive.
We could have had 1-2 gas generation plants for that money if anyone in charge was competent!
How come the bird choppers don't have to invest £50m to replace what they kill?
You've been talking to Claire? She's everywhere at the moment. On manoeuvres for post-Rishi?
The Department for Energy Security and Net Zero seems a complete oxymoron!
"The UK will become the first country in Europe to launch ..."
Except that Russia is in Europe by the conventions governing these things.
Hope that they will have better quality control than the pellet makers. Japs returned sub standard product. See the ships are still in docks at Barrow. Will they be useable for the new product?
Tangentially related, China, Japan and Korea build 94% of world civilian shipping - the stuff that brings us the Chinese goods or the US LNG.
https://foreignpolicy.com/2023/04/03/global-shipping-china-dependence-korea-japan-britain/
"In the early 1950s, Britain and Western Europe still dominated shipbuilding for the global market. But since then, and especially since the 1980s, globalization has taken its predictable course. By 2010, only about 3 percent of all ships were made in the U.K. and Europe; after China, South Korea and Japan built the most. Today, the EU reports it accounts for 6 percent of civilian shipbuilding, while the United Nations Conference on Trade and Development reports that China, South Korea, and Japan together build 94 percent of the world’s civilian ships."
The more I look at China the more I think we should just welcome our new Chinese overlords, before the people who closed down the Western shipyards and Western manufacturing get round to it – “we know these people, and can help you exploit them in exchange for a small cut!“.
"Nearshoring, friendshoring, reshoring" is going to be bloody difficult, if not impossible - as James Dyson pointed out, there's "process knowledge" - the sum of decades of learning-by-doing which has vanished from the UK.
OK, the Chinese have done it in 50 years, but they had Westerners to teach them. They're unlikely to return the favour because of something called national interest, a concept that's vanished in the West.
Shipbuilding is the worst example to pick for the ‘closing down of the shipyards’ by Teh Tories. Or Teh Elite. Or Teh WEF.
Shipbuilding was and still is one of the most labour intensive of industries. Certainly of the heavy industry.
The differential in wages between a labourer in the far east and the North East of England is some ten to one.
It is impossible to have any labour intensive industry, that is competitive, if the difference is that great.
That’s not to say the Uk and Western Europe didn’t try.
It’s why the mid 1970s to late 1980s were so difficult.
The post war shipbuilding boom, and the Cold War, just about allowed ‘ business as usual’ into the 1970s.
Nationalisation was the next phase. With the predictable results of trying to make products for below cost and sell at a profit.
Privatisation follows. And then closure.
Even back when the shipyards were being nationalised in the Uk, the EEc was dead against any funding of military use ships. So the military sector was excluded from eu monies.
The private sector was competing against South Korea. Who were already selling their very cost efficient ships at prices below what the west would..
so far below that it was a mystery why they didn’t raise the price? The order books were full. If the ships were 30% more expensive
The Uk still couldn’t build them for that price.
The reason they didn’t, was they were trying to keep the communist countries out of the game as long as possible.
China and Vietnam.
The top 3 nations, China South Korea and Japan, account for 75% of all world tonnage built.
The highest tonnage in Europe is Italy. For cruise ships and super yachts.
South Korea was poor until relatively recently. Japan hasn't been poor for a while. How come they manage to maintain a decent ship building capacity.
You can't tell us that a Korean or Japanese worker is getting 10% of one on Teeside!
Shipbuilding, steel making, coal mining are tasks we are too expensive at doing. Which is fine so long as we can do more sophisticated things - finance, insurance, film making, aeronautics, missiles, media. Which we do, but not enough and not in the places where people are short of work.
But there is the rub, we have not kept up education wise. Not merely due to financialising the universities into Mickey Mouse degrees and unis offering the Harry Potter experience for foreigners. We have also created a class shift, the top nobs now do middle class jobs and the middle class have to to former working class jobs - albeit not in a steel works or coal mine and the former working class do zero hours - or the lucky ones make out like bandits on the tools. The former top jobs seem to have been taken over by criminals, slappers and out of work royalty.
We have also not kept up housing wise, we have to be expensive because we have to spend a lot on housing. And because we spend too much on housing we don't reproduce in sufficient quantity and/or we reproduce late which introduces problems and expense.
Which begs the question - is it possible to mass educate more and better - much more and much better. Think tensor calculus and the hermeneutics of Shakespearean plays for all at 18. Is that possible and could it make us more competitive in the world? As things stand everyone gets a 2.1 and to differentiate themselves have to go on to an MBA and gold star. The cost of which forces them into the McKinseys of this world - very elevated but productive? And they don't set up shop in Merthyr Tydfil.
So, do we take education seriously - and for whom?
It’s a good question. Why did Japan manage where the Uk failed?
Japan took the lead in mammoth ships. Supertankers and bulk carriers of brand new dimensions. In the late 1950s and 1960s.
This was mainly because, they were already building them in ww2.
The HMS Vanguard, Royal Navy, largest and fastest of the UK battleships. Entered service in 1946. Was 44,000 tons.
Built on the Clyde.
The Yamato 72,000 tons, sunk in 1945 by the USN’s planes, was one of three.
Built at the Kure Navy yards. Which, suffered relatively little attention from the US airforce during WW2.
Japan had a head start on the ‘next’ phase of shipbuilding.
Though, it’s still an amazing thing they managed to do to hold on to that shipbuilding.
Even fewer natural resources than the UK. Though double the population.
Japan is an anomaly of economics.
“there are four kinds of countries: developed countries, underdeveloped countries, Japan, and Argentina.”
Meaning that Japan is rich. When by any measure, based on its geography and resources, it should be dirt poor.
Argentina, by the same measure, should be a G10 nation. Instead of bumbling along like Sudan.
Remember it’s not just the UK who is looking sad as the world’s former leading builder of ships.
The USA is 6th.
Germany produces the best non-nuclear submarines.
France I don’t know. But it’s always in the top ten.
And the newest emergent, is Brazil.
One day, Latin America will get its act together and start a whole new China.
Then, there’s Africa!
BQ - Eamonn Fingleton on Japan v Harland and Wolff. He was the FT's Japan correspondent for 20+ years. One of his main themes is that the success of Japan, Korea, China is little to do with free markets as we might understand them.
"the Chinese economic system is not capitalism, nor is it converging toward capitalism. China is operating an adaptation of the East Asian economic system launched in Manchuria in the 1930s, perfected in Japan proper in the 1950s and 1960s, and now widely copied throughout East Asia. As itemized by Richard Bernstein and Ross Munro in their 1997 The Coming Conflict with China, features of the Chinese version of the East Asian economic model include a labyrinthine system of trade barriers; an artificially undervalued currency; an industrial policy focused on developing pillar industries and using export subsidies to give them competitive advantage; and pressure on foreign companies to transfer their production technologies. In some ways, this approach resembles capitalism–it makes extensive use of markets–but its fundamental logic is quite different. Whereas authoritarian political controls constitute a hindrance to the efficacy of capitalism, such controls are essential to the functioning of the East Asian system."
https://www.fingleton.net/the-long-arm-of-japanese-industrial-policy-northern-irelands-experience/
What does Japanese “targeting” mean? The term refers to a pattern for the Japanese state to make common cause with Japanese corporations in a no-holds-barred effort to seize leadership in important global industries. Some tactics are more covert than others and not infrequently they are completely unethical. But we needn’t dwell on this as in reality one of the most effective Japanese tactics was the relatively mentionable one of keeping the yen massively undervalued. To that end Japanese officials organised cast-of-thousands pantomimes aimed at convincing visiting foreigners that Japan was a Third World country and thus posed no threat to the advanced industries on which the West’s economic success was based. Thus although worker productivity in the Japanese shipbuilding industry was broadly on a par with the UK industry, London acquiesced in a hugely undervalued yen. This meant that the wage bills Japanese shipbuilders had to pay were little more than half of UK levels. With a cost advantage on that scale, the Japanese soon had the entire UK shipbuilding industry on the run. Cities like Newcastle, Glasgow, and Liverpool soon felt the impact but nowhere were the consequences more lamentable than in Belfast.
Yet no one in London lifted a finger. The pound was kept permanently overvalued in a manoeuvre that suited a callous and blinkered City of London. Meanwhile London elites rejoiced in the fact that an overvalued pound meant their money went further when they travelled abroad on holiday.
It is worth considering the might-have-beens. Had successive British governments stood up to Japanese targeting, the outcome could have been very different. Just how different is apparent from a look at the trajectories of Harland & Wolff’s once puny Japanese challengers. Take, for instance, Mitsubishi Heavy Industries (MHI). In the 1950s it was broadly as advanced as Harland & Wolff. Today it is a manufacturing colossus that leads the world in a host of super-advanced industries. MHI’s products include space launch vehicles, missiles, aircraft, machine tools, hydraulic equipment, and aerospace components (it is a major supplier to Boeing of components so advanced that Boeing can’t make them for itself).
MHI’s achievement can be summed up in one number: it recently employed more than 81,000 workers. As for Harland & Wolff, the yard that built the Titanic survives, sort of, doing marine engineering odd jobs. According to Wikipedia, at last count it employed just 79 workers — little more than, say, a successful suburban car servicing workshop.
The recent revelation that Chinese coal burning - just coal, let alone oil and gas - currently accounts for more than 25% of global carbon emissions, really should be a wake-up call for Britain - in that whatever we do regarding net zero, it makes damn-all difference.
Remember that coal and oil burning, according to the IEA, was at record levels last year - so co2 emissions will be at record levels. And China's got what - maybe a third of them?
Whether you're a true believer in AGW or not, it means that China is the #1 manufacturing economy, the former "gigantic boiler" of the US is now just an old boiler, and the "rules-based international order" where we can invade Iraq but Russia can't invade Ukraine is one with Ninevah and Tyre. Yes, there are many bright and innovative people both here and in the US (see Dragonfire) but the big battalions are all in the Far East.
jim - if labour costs were everything, Burkina Faso would be an industrial giant. Where are their shipyards?
Our Asian competitors are following 1930s Manchurian economic policy, our European competitors are following Friedrich List. Here in the UK, Joseph Chamberlain campaigned for Tariff Reform as long ago as 1903; even when we were still the "Workshop of the World". One of the reasons for Brexit was the desperate need for Economic Sovereignty, but our greedy rulers are still intent on financialising everything so as to steal every asset that isn't nailed down.
I remember BQ pointing out that most of the money wasn't made in our industrial workshops, it was made in the City of London - because all those goods were sold "on tick".
Our ruling classes have failed us badly. We need a complete clear out.
Neema Parvini ("Academic Agent") is correct with his call to campaign for Zero Seats for the Conservatives at the next General Election.
Picking up on @Wildgoose's segue, seems the BoE doesn't like banks exposure to PE. PE works with a lot of cheap capital but the failure of these PE vehicles with their ratchet loans could cause more damage to London than a Putin nuke.
Can we afford another banking crisis?
I hadn't realised the only commercial HALEU sellers were Russia and China.
When you look at the "UK #8 world manufacturer" stats a fair chunk of that is stuff like Scotch whisky - very nice but if the poo hit the ventilator it would be banned elsewhere just like proper vodka is now. I bet the Chinese could make it. Indian whisky is not too bad.
Just to enlarge on the difficulty of rebuilding an industry once it's gone, just look at the trouble that the USA, who invented integrated circuits, are having replicating a TSMC plant in Arizona. The TSMC founder, who learned the trade during 25 years at Texas Instruments, reckons it's “a very expensive exercise in futility.”
https://restofworld.org/2024/tsmc-arizona-expansion/
I wonder how soon the point of inflexion will be reached. Blinken is heading for China to tell them not to support Russia. ATM the reply will probably be waffle about the importance of dialogue and peace, something he can spin as success, but at some stage the answer will be "no, and what are you going to do about it?"
The real come-to-Jesus moment for US elites won't be when the Saudis and Egyptians turn to China. It'll be when Israel does.
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