The Green Transition: Hunt's big trap, and a new pile of pylons
Weekly analysis of the shift towards a new economy.
Dear Reader,
Happy Friday from the New Statesman Spotlight team. As ever, find our coverage here.
Next week we’ll have a double issue of the Green Transition in the run-up to Cop28. As the world’s leaders, captains of industry, and the assorted great and the good gather to talk about reducing emissions at the invitation of a UAE oil boss, we’ll have reporting direct from (extremely) sunny Dubai.
But first, analysis of the Autumn Statement – what else? I’m grateful to my colleague Megan Kenyon for the razor-sharp original take on all this, which is linked below.
Have a great weekend.
Political Traps and a New Pile of Pylons: The Autumn Statement in Full
Jeremy Hunt stood up in the Commons to deliver his Autumn Statement this week. He painted a rosy picture of rising wages, falling debt, and reduced taxes. He might be the only man in Britain who believes any of this. Real wages, despite a recent uptick, are lower than they were 15 years ago, back when The Ting Tings had a massive one-hit-wonder with “That’s Not My Name” (which I think we can all agree feels like a different age).
Meanwhile, public debt is up, in both absolute numerical terms and relative to GDP. And despite Hunt’s cuts (careful repeating that quickly) to national insurance contributions, we’re stuck with the odd combination of a dilapidated public realm, record high public spending, and the highest tax burden in seven decades which nevertheless fails to deliver services to anywhere near the standard that voters expect.
So what does it all mean for the green transition? Well, despite the positive window dressing, the Chancellor has chosen to set what is known in specialist circles as A Massive Political Trap for the Opposition, by setting departmental spending in cash terms. That means, in per-capita real terms (adjusted for inflation), unprotected departments will see budgets fall by 14 per cent in the next five years – equivalent to the proportion that the austerity-mad George Osborne swung his axe at.
Part of this comes from massively reduced capital budgets, used for things like investment in mass public transit networks (needed to decarbonise transport), new energy and grid infrastructure, or any other fixed assets for the public sector, like more energy-efficient social housing, hospitals, schools or public buildings.
For Labour’s Rachel Reeves, hoping to enter Number 11 next year, that’s a problem. It means she will have to stick with Hunt’s budgets (meaning big cuts), or will have to revise them with tax rises or more borrowing – contravening her fiscal rules. With all this in mind, the slow, cautious acceleration towards the £28bn-a-year Green Prosperity Plan looks set to get even slower should Labour march to victory after 18 years of election night hurt (never stopped them dreaming, etc.). Any new spending, perhaps funded by tweaks to capital gains, dividend taxes, or non-dom status, looks set to be eaten up by keeping local councils, police and fire services, transport, planning and everything else just ticking over.
Aside from laying out bear traps for political opponents, the Autumn Statement had a fair amount to say about planning in particular. There appears to be a broad consensus from both parties that planning bottlenecks are holding back the development of the new grid infrastructure that is essential for reaching net zero. As Megan Kenyon has pointed out, it can often take new connections to power and electrical infrastructure 15 years to get the green light. Environmental impact assessments (EIAs) on infrastructure can cause big delays. For the Sizewell C nuclear power plant, the EIA was “44,260 pages long – ‘more than 30 times longer than the complete works of Shakespeare’”, according to the campaign group Britain Remade.
Policy-bods across the political spectrum seem to think building new power lines and energy generation projects can, and should, be made much easier. Indeed, if we have any hope of meeting climate commitments, we need to start building this infrastructure much faster.
As Megan writes, Hunt and Reeves both want to “dramatically reduce the time taken for major applications to be given a decision, and offer community benefits” for those areas that projects affect. This includes government measures to offer funding to communities where new infrastructure is built, so properties closest to new power lines could receive up to £1,000 a year off their energy bills, and communities hosting pylons will be given money for projects in the local area.
That might be enough to turn a few nimbys into yimbys (yes, that’s a thing), so Labour will be glad the Tories have made a start on these kinds of planning reforms. But on the broader issue of fiscal tightening and yet another decade of austerity, major headaches are just round the corner.
In Brief
ICYMI: Spotlight had a whole supplement on sustainability and the road to Cop28 out with the New Statesman print magazine last week. Here’s a PDF if you didn’t nab yourself a hard copy.
Contracts for Deference: Two researchers from the Common Wealth think tank penned this excellent piece for Spotlight on the failure of the last Contracts for Difference auction to receive any offshore wind bids. In response, the government his upped the strike price by a whopping 66 per cent. But will this kind of scheme be enough to get us to net zero?
The best-laid plans: As mentioned above, Megan Kenyon has this great Autumn Statement response piece on Jeremy Hunt’s plans for, er, planning, and how they will affect energy upgrades.
See you next week.
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The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
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Please send any news or comments to: jonathan.ball@newstatesman.co.uk