Saturday, December 14, 2024

With its energy policy, the government cannot afford to say one thing and do another

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More than most senior members of the government, Ed Miliband should understand the importance of winning the arguments as a prerequisite for political success.

Without wishing to be gratuitously rude or stirring up too many painful memories, it was Mr Miliband, after all, who led his party to defeat at the general election of 2015 because he failed to convince a sceptical public that his policies would work. His “EdStone” of promises literally carved in stone serves as a lasting monument to that unhappy episode.

Today, his task as secretary of state for energy is hardly less daunting or important. He has, once again, to persuade the voters that the laudable ambitions set out in his Clean Power 2030 Action Plan will indeed yield lower gas and electricity bills, ensure there will be no blackouts in the transition to renewables, guarantee national energy security, and that the environmental benefits will be worth the investment.

It is fair to say that, thus far, his arguments have not yet won the day.

The costs of transforming Britain’s energy supply set out in the latest plan are formidable indeed. The investment in renewable power is estimated at some £40bn a year, and the past record of such mega projects, under all parties, is not promising. The ill-fated HS2 scheme proves that point most poignantly.

More relevantly, the historic British experience of developing nuclear power is one of vast overruns in cost, and equally lamentable underestimates of the price of disposing of waste and eventual decommissioning. When the first nuclear power stations were opened in the 1950s, the British people were promised a utopian world of electricity so cheap, it wouldn’t even be worth metering.

Mr Miliband, to his credit, does not indulge in such fantasies – but he is yet to explain how his broad promise of “lower bills” will pan out, or when they will arrive. He is often asked about this by the Opposition in his appearances in the Commons, and he invariably sidesteps the questions. Obviously, the British secretary of state for energy has little influence over global energy prices, still less the geopolitical reach to prevent the wars and coups d’etat that have historically convulsed the markets, as we saw with the Russian invasion of Ukraine.

Yet, in return for the investment that, one way or another, consumers and taxpayers will have to make in this bold plan, they surely deserve to be “shown the workings” of how and when they might see the financial benefits. The vibe from the energy companies and the experts is that higher energy prices are here to stay and Mr Miliband hasn’t done very much to lift the mood so far as bills are concerned.

Nor is there great clarity about the future energy mix. Making his big announcement on a cold winter’s day, Mr Miliband invites the layperson to ask the simple question: “What happens when the sun doesn’t shine and the wind doesn’t blow?”

The answers Mr Miliband gives are, once again fine in principle, but attract the same doubts because they are so unspecific. There will be, we are assured, a continuing “fleet” of gas power stations providing, overall, some 5 per cent of UK energy needs, and there’s a “commitment” to nuclear power. However, his plan ominously notes that “the Budget set out that final decisions on Sizewell C and the Great British nuclear-led small modular reactor programme will be taken at the spending review”.

If the rumours about the Treasury’s intentions are correct, that sentence is not something that consumers and businesses will feel confident that they can rely on to keep the lights on in the years ahead. It is also worth noting that the Scottish government has ruled out any new nuclear installations.

Mr Miliband does have the planet and the future of life on Earth on his side – the transcendent issue of our times. There is no doubt that climate change is real, and that every nation should do its bit and adhere to the promises made under the Paris Agreement and the various Cop summits to aim for net zero fossil fuel emissions.

In that sense, there is no choice in the matter, yet consumers and businesses can only wholeheartedly join in the effort if they can be sure that it will not make their lives unbearable.

One other, non-trivial aspect of this is the impact of large-scale onshore wind farms, solar farms and the pylons and other infrastructure that accompany them to connect energy generation to the national grid. Collectively – along with the ambitious housing targets announced this week and prospective rail and road projects – the next few years will see the biggest changes in the landscape since the Industrial Revolution. Again, those who will have to live with this scarring will need to be persuaded that it is indeed worth it.

One of the most awkward objections to Mr Miliband’s plans is the fact that the UK is a relatively small player in global terms, even accounting for “imported” CO2 emissions on goods manufactured elsewhere. As with the old arguments about nuclear disarmament, Mr Miliband’s mission would be enhanced if he could point to some evidence that other nations, including China and India, are going to follow the British example.

Unfortunately, and deeply depressing for the future of humankind, it looks certain that the US under Donald Trump will “drill, baby, drill”, withdraw from the Paris accords and undo much of the global progress made in recent times.

Mr Miliband has right on his side – but Labour in office has shown itself to have a tendency to stumble when it comes to good causes. At the same time, the public has wearied of this administration’s fondness for saying one thing before doing another; the employers’ national insurance rise that also hit employees being the most damaging case in point.

So when it comes to energy policy, it needs to do more to convince those who are doubtful about the environmental arguments, and others who believe in the science but fear the practical effects on their living standards and their local environments.

The stakes could hardly be higher, given that the leader of the opposition, Kemi Badenoch, has declared herself a “net zero sceptic”, and Reform UK are even more dismissive.

This time, Mr Miliband really must win through.

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