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‘Labour Must Revisit £28 billion Green Pledge: It’s Affordable, Profitable, Crucial for Net Zero and will Create Jobs’

Labour ditched its plans in February but has announced a new net zero transition policy – it isn’t enough

Labour Party leader Sir Keir Starmer making a speech in Grays, Essex while on the General Election campaign trail on June 9. Photo: PA Images / Alamy
Labour leader Sir Keir Starmer making a speech in Grays, Essex while on the General Election campaign trail on June 9. Photo: PA Images / Alamy

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On 31 May, Keir Starmer announced Labour’s net zero transition policy platform for the election, with the key plank being Great British Energy, a publicly owned company headquartered in Scotland that will invest in domestic clean energy generation through £8.3 billion in funding over the parliamentary term.

While highlighting the jobs and lower prices resulting from renewables, Starmer suggested employment would be protected as Labour would not be “turning off the taps” of oil and gas, which instead would be “part of the mix for decades to come”. He cited a wish to avoid the brutal transition away from coal undertaken in the 20th Century.

These proposals are a start, and certainly more ambitious than anything that has been set out recently by the Government. But our programme of research shows that a return to the £28 billion per year investment commitment that Labour dropped in February is affordable, would produce a massive return on investment and is essential to meeting the goals of a just transition to net zero.

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Instead of setting out the more ambitious plans required, Prime Minister Rishi Sunak responded to Starmer’s announcement by saying that “you don’t deliver any energy security for our country with a logo” in reference to GB Energy. Alongside this barb, he cited a need to retain energy security through North Sea Oil and Gas and to “get to net zero in a more proportionate way that does not load up ordinary families with thousands of pounds worth of costs”. Meanwhile, Kate Forbes, Deputy First Minister of Scotland and Deputy Leader of the SNP, claimed that some 100,000 jobs could be lost were Labour to implement their policies. 

Unfortunately, as Starmer’s responses to interrogation suggest, even politicians notionally committed to a more rapid transition often fall into the trap of accepting the terms of the argument set out by their opponents.

Let’s challenge those arguments instead.

The energy security and economic lines of attack are easy to deal with. The way we have chosen to structure North Sea Oil and Gas means that the output from the fields is owned by private companies and sold on the international market, at international prices. Indeed, former Secretary of State for Business, Energy and Industrial Strategy Alok Sharma opposed his government’s bill underpinning the new licences on exactly this basis. The oil extracted is also primarily refined elsewhere and imported back into the UK. There couldn’t be a less secure form of energy. We don’t even need to imagine the security risks of such a system, having endured an energy-driven cost-of-living crisis following the Russian invasion of Ukraine.

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Instead, we can have secure, domestically generated, stably priced and, indeed, cheaper renewable energy powering electric heating and transport. We must also reform rules that, insanely, lead to the electricity price primarily being set by the cost of expensive fossil-fuelled generation and the majority of ‘green levies’ being added to the more environmentally friendly electricity. Residents and businesses need never again be hit with massive spikes due to the actions of mad dictators and international commodities speculators. GB Energy can do this, but only if a Labour Government returns to the more ambitious £28 billion commitment that would enable the scale of investment in renewables generation and storage required. There needs, too, to be social control over local energy networks and generation with benefits returning to the nation and communities. Leveraging private investment, where appropriate, through tax incentives would lead to the kind of meaningful deployment of capital that governments have utterly failed to secure.

Importantly, our programme of research has shown that infrastructure spending by government has productivity returns of almost three times the initial outlay, through economic multiplier impacts, based on analysis of the effects of infrastructure spending across Europe in the last decade. Just that initial £28 billion investment would produce returns for the economy of almost £77 billion, by creating employment and enabling private sector economic activity through the supply chain of those infrastructure providers. If we think of the nation as a business, or even as a household as many Conservative chancellors have liked to imagine it, we can’t afford not to invest in such infrastructure using public funds. In the United States, in the first year following the Biden administration’s Inflation Reduction Act, there had been $278 billion in clean energy investments, 170,000 new jobs, increases in renewable electricity generation and, crucially, the period was accompanied by a much steeper decline in inflation and much higher rate of growth than in the UK. Effectively, we need our own mini-Inflation Reduction Act. 

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So now we come to jobs, a very real worry for the 260,000 workers in carbon-intensive industries that we must not ignore. We cannot replicate the devastation wreaked on coal mining communities in the 1980s and save up problems for the future. We propose a ‘Quadruple Lock’ for such workers.

Penny pinching and austerity is economically and environmentally devastating. Largescale investment in a Green New Deal produces growth, jobs, significant additional tax revenues and, crucially, it provides energy and national security. It is, put simply, the only way out of our low-growth, low-productivity, high cost-of-living, insecure spiral. We have fully costed and demonstrated how these proposals, as part of a larger package of policies, are more than affordable through the huge returns on investment produced.

We can’t afford to wait any longer for higher environmental and economic standards, we have to act now.

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