The Green Transition: Labouring under false pretences?
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday! Jonny Ball here – associate editor of Spotlight, the New Statesman’s policy section. As ever, our coverage is at newstatesman.com/spotlight
Today’s GT is brought to you with a dispatch from the Labour Party Conference in unseasonably warm Liverpool this week, where some flesh was added to the bones of GB Energy policy, and private sector bods rubbed shoulders with MPs and hacks over warm bottles of Peroni.
We’ll get straight into it, with exclusive comments from shadow energy security minister Alan Whitehead and head of the GMB union, Gary Smith.
Have a great weekend!
Labouring under false pretences?
From the edge of the sprawling Labour Party Conference venue, where hungover lobbyists jab at their phones and desperately smoke cigarettes, you can see the stories of the energy transition in physical form, on the other side of the River Mersey.
Tranmere Oil Terminal unloads tankers from across the world. Its haul is piped down to Stanlow, a huge refinery that you can also see. But look in the other direction into Liverpool Bay, and there’s a 380MW wind farm, owned and operated by Orsted, a state-owned Danish company. The mayor of Liverpool City Region, Steve Rotheram, wants to go further, with a tidal barrage to generate huge amounts of clean electricity for decades to come. The move is opposed by some conservationists who worry about its effect on wildlife.
There can be few more apt places to view the problems, pitfalls, and contradictions of the green transition. And suitably, just behind me, the shadow energy security minister Alan Whitehead is talking. The day before, on the conference floor, delegates voted with Unite leader Sharon Graham’s motion to nationalise the energy industry. But there’s little mood for that where I’m standing.
“It makes no sense to buy up or control the kit of the past”, Whitehead told a crowd gathered for the Socialist Environment and Resources Association’s fringe. “It makes a lot of sense, however, to buy into, and in some instances control, the kit of the future.”
Whitehead, who has held the energy brief since 2016, was elaborating on plans for the state-owned GB Energy, a policy first announced by Labour at its conference last year. This isn’t about nationalising the private sector, he assured the audience, but creating a parallel public company with a “catalytic role”. GB Energy would be a “fairly lean vehicle”, he added (capitalised with an initial £8bn), that would be involved in providing “seed capital” and “derisking” local green energy projects. He told attendees it was something for the “first 100 days” of a Labour government.
“It’s both macro and micro”, he told Green Transition. “Investing and part-owning parts of the low-carbon kit that we’re going to need on the large-scale… but also making sure low-carbon local energy projects work. If we get back to community-based onshore wind projects, those very often fail not because the idea isn’t good or the need isn’t there, but because they simply don’t have the pockets to get it over the line and deal with all the hurdles. So GB Energy will guarantee that process and underwrite it.”
If this is the model, then GB Energy’s Local Power Plan proposals sound suspiciously like they could morph into the centralised competitive bidding pots castigated by senior Labour figures like Lisa Nandy, and more or less anyone familiar with the local governance scene (yes, it’s a scene. If you know, you know).
Elsewhere, the exhibition hall is packed with companies displaying their net zero credentials. Conversations with business’s public affairs maestros follow a familiar pattern: we want government to “derisk” private investment, and provide stable, predictable “Bidemonic”-style opportunities for us to get behind. If in the days of George Osborne and austerity, active government and public spending was seen as “crowding out” the private sector, this conference is all about the state “crowding in” private funding with big investments of its own, mitigating the downsides for private capital in a volatile world.
Shadow energy secretary Ed Miliband’s speech name-checks Liverpool Bay’s wind farm operator Orsted as a model of best practice – the renewables giant is made up of 50.1 per cent government-held shares, and 49.9 per cent private. The party says it will “unlock £200bn of private investment” with its clean grid plans, opening up bottlenecks, speeding up grid connections that are currently delayed by up to fifteen years. The new transmission infrastructure required will necessitate a revolution in planning regulations, ignoring local opposition to hundreds of miles of cables and pylons running through England’s green and pleasant land.
Not everyone is convinced by the rhetoric heard everywhere in Liverpool – a ‘just transition’, a clean grid by 2030, hundreds of thousands of net zero jobs.
In a private New Statesman round table, GMB general secretary Gary Smith made the opposite case on behalf of his half a million members.
“Without gas we would have had 250 days of blackouts last year” he said. “Forty per cent of electricity is coming from gas… Offshore wind has not delivered the jobs that have been promised… There's very little in the way of UK content, apart from sweeping up dead birds… we’ve got to be honest on the scale of the challenge. Let’s focus, like Biden has, on jobs and national security.”
With an autumn election likely, the next year will be tortuously slow for Labour as the party tries to bring unions, the private sector and voters along with its vision for a green economy, while trying to balance it all against a long list of fiscal commitments. The party has a huge task on its hands, to square the circle of this historic challenge.
In brief
Go hard or go home: No, this was not the chant that rang out over Labour conference drinks receptions. It’s the message the Green Alliance wants to send to the opposition over their net zero plans in this sharp New Statesman piece by Steve Coulter, head of economy at the think tank. Early investments pay large dividends – acting now over energy infrastructure and renewables could re-energise the UK economy.
Power in a union: Five trade union general secretaries have penned an essential bit of partnered content produced by New Statesman Spotlight and National Gas. GMB’s Gary Smith (quoted above), Unison’s Christine McAnea, Unite’s Sharon Graham (Green Transition’s passim), and the heads of Prospect and Community represent well over two-and-a-half million workers between them. They’re calling for increased investment in hydrogen for difficult-to-transition industries like cement and steel.
With friends like these: The government’s own independent net zero advisory panel, the Committee on Climate Change, has released this assessment of Rishi Sunak’s climate row-backs. It makes for grim reading: “The cancellation of some net zero measures is likely to increase both energy bills and motoring costs for households”, it says. “The Prime Minister’s announcements also increase longer-term risks to meeting the 2050 net zero target.”
Thank you for reading, and please send any news or comments to: jonathan.ball@newstatesman.co.uk
See you next week.
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