The UK General Election - 4th July 2024

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Labour Party Conference Energy Roundup: Good jobs. Cheaper bills. Real energy security

Jade Pallister

Account Director

The Labour Party Conference saw the Party come out to fight for climate and net zero. If the Conservative Party Conference saw a “pragmatic” approach to net zero, Labour sought to provide an optimistic and patriotic message about the future of British Energy. Energy reform and investment was noted as a component of every keynote speech, from Keir Starmer, who lauded the switching on of “Great British Energy” to Rachel Reeves, who announced a “once in a generation set of reforms” to critical infrastructure and energy, and finally, to Ed Miliband who declared that under Labour “Britain will be an energy superpower once again, exporting clean power to the world and controlling our economic destiny.”

In these speeches, we heard about a new Energy Independence Act, and further detail of key policies around the National Wealth Fund and Great British Energy, accompanied by messages on lowering bills for working families; working in partnership with business; and using technologies to create jobs in coastal and former coal communities across the UK.

PLMR provides an outline of the main announcements below, alongside political analysis.

Key energy policies

  • Energy Independence Act [new]
    • A new Energy Independence Act – framed as an act to tackle energy security. The act would legislate for GB Energy and the National Wealth Fund.
    • Further detail has been light but we expect this to include “a coherent energy plan for the energy system of the future” (Alan Whitehead) and powers to deploy what is required to meet a clean power system by 2030 at speed.
    • The idea is that this would be passed in the first 100 days – at the King’s Speech – so it could become law soon after a general election win.
  • National Wealth Fund [further detail]
    • Designed to co-invest in projects that are seen as necessary to the energy transition and Britain’s industrial future – but which may not be energy projects themselves.
    • This will take stake in critical projects, with Reeves mentioning examples of eight new gigafactories for electric vehicle batteries, six clean steel plants and nine renewable-ready ports.
    • The Party also announced that £1 of public money from this fund will have to attract at least £3 of private sector investment.
  • Great British Energy [further detail]
    • At Conference, Labour announced that GB Energy will open up new grid construction to competitive tendering, with GB Energy looking to bid into that competition to build or co-build that new grid where necessary.
    • GB Energy will continue to invest in other technologies, such as investing £1 billion a year to develop local, renewable power owned by local people (community energy) through loans.
  • British Jobs Bonus
    • £2.5bn of public money to attract private investment to industrial heartlands, coalfield communities, coastal communities, and oil and gas communities by giving businesses that invest in these areas a “bonus”.

Analysis

Faced with criticism that Labour lacks policies, Conference showed that energy policy will play a central role in Labour’s campaign message to get Britain’s “future back”. Faced with criticism that net zero would increase bills, Labour came out to fight through energy. Great British Energy, a video released the day after Conference revealed, will “increase energy security and lower bills, making families and businesses better off.”

Conference expanded on Labour’s plan to do it – providing some additional detail on previously announced policies. What was obvious was their focus on an energy transition in “partnership with business”. This was reflected throughout the Conference, from the exhibition hall, to fringe events and to private roundtables. The Party focused on working to secure investor confidence in the UK, in new technologies and new infrastructure, as it believes this is key to creating jobs across the country. In a competitive international investment environment, this certainty will be a relief to many. Indeed, on one panel which featured Ed Miliband, a senior energy executive noted that though they were apolitical as an organisation they “much preferred the messages of Labour to the Conservatives” at Conference.

This need for partnership was reflected in developments on the National Wealth Fund. The fund will invest, alongside the private sector, in key infrastructure and technologies, including ports, hydrogen, and local community energy. This is a fund that will focus on supply chains, infrastructure, and jobs as much as investment in new technologies. The focus on the partnership with private sector was both a response to a competitive investment climate as a defence against Conservative attacks on un-funded spending – with the Shadow Chancellor also announcing a new 3:1 private-public ratio lock for investment.

Some of the National Wealth Fund investment would be delivered through Great British Energy, a publicly owned “champion” of British energy which would invest in partnership with the private sector. At Conference it was revealed that Great British Energy will be based in Scotland – a nod to the Labour strategy in Scotland – but also, Keir added, because Scotland “has the skills” to deliver the transition.

Grid and planning reform took centre stage, both in the Conference Hall and at the fringe. Starmer outlined the “new effort to re-wire Britain” and “lay the cables our future prosperity needs.” Reeves announced how grid reform would unlock “£200bn worth of projects” by opening up new grid construction to competitive tendering. This, she added, would lower bills, create 220,000 new jobs, and help tackle energy security.

In comparison, there were only minor mentions of home insulation – bar the reiteration of a Warm Homes Plan that would insulate 19 million homes. This was likely a purposeful move – as the Party publicly avoided a debate on what the Conservatives have deemed as costly heat pumps and boiler replacements. Transport also played a back-seat role, though Jonathan Reynolds did note that Labour would reinstate the 2030 ban on petrol and diesel cars. Once again – however – his main speech focused on energy, creating jobs and giving certainty to businesses.

There were other notable absences also. While the Party recognised that communities should benefit from the “re-wiring of Britain” – exact information about who will pay for upgrades and how local communities will benefit from pylons was lacking. So while Labour sees energy as a safe attack on Conservatives, they still remain exposed on key challenges around the cost of insulation and how the transition will impact on consumers.

Also notably absent from public facing keynote speeches at Conference was the word “net zero”. This was a tactical messaging response to the efforts of the Conservative Party to politicise the issue in recent weeks. In the fringe, however, it was made clear that a commitment to net zero – and particularly a net zero power system by 2030 – remains a key commitment of the party.

Overall, the Conference was a clear restatement of the party’s commitment to net zero and the energy transition. Though publicly we can expect this to be talked about through messaging on bills, jobs, and opportunities for ‘national renewal’.

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