Show Notes
When it comes to addressing the trilemma of energy policy in the UK (net zero, energy security and customer affordability), there are three overall policy approaches. “Policy option 1” is about setting targets: pick a year by when net zero is to be achieved, and then do whatever is necessary to get there. “Policy option 2” is the other way around, looking at what can be afforded and then at what can be achieved with the available pot of money.
There is a third set of more extreme options of stopping oil and gas now, or just assuming that science and technology will eventually solve the problem. Both are dangerous.
What is now needed is a rational debate and honesty. Politicians need to engage in an open conversation with citizens and to work out how to maximise the benefits from what can be afforded, by making hard choices between the options.
More from Helm Talks - energy climate infrastructure & more
Many voted to stay in the EU (including me). Rejoining the EU may sound simple, but the Europe Britain left no longer exists. With a string of major elections approaching and far-right nationalist parties surging across the continent, a future EU could be shaped far more by figures such as Le Pen (France), Meloni (Italy) and the AfD (Germany) than by the centrist consensus of the past. If a more Gaullist Europe emerges, one of the biggest obstacles to re-entry may be a simple question from Brussels, Paris and other capitals: why would they want Britain back?
Britain faces a crisis of delivery. From nuclear power stations to airport runways and water infrastructure, costs have spiralled and timelines have stretched into decades. How has a major modern economy become so incapable of building what it needs? From amongst the most expensive nuclear power stations in the world, to huge costs for airport runways and the absurdities of the HS2, Britain is an infrastructure basket case. This matters not least to ensure that the economy can grow, as the politicians keep talking about.
As oil prices continue to fluctuate in global markets, Britain’s energy costs have become a distinctly British crisis. They cannot be explained away as a temporary consequence of global events. Industrial electricity prices continue to be among the highest in the developed world, consumer bills remain high, and there is little prospect of relief even in the longer term without a fundamental rethink of policy.
Recent prime ministers have become very good at the politics of the long grass, and Andy Burnham is at risk of following this line. Promise the big things: growth, clean rivers, better defence, cheaper energy, new nuclear, decent transport and social care. Then push the hard choices beyond the next election, offer short-term palliatives, and hope that someone else will eventually pick up the bill. The result is not merely delay; such an approach actually results in higher costs in the long term, weaker infrastructure, and yet another obstacle to the growth that he, and many of his predecessors claim to want.
Following on from the latest change of Prime Minister and announcements about his new Cabinet, what is going to change? Andy Burnham has a new ten-year plan, and is promising a fundamental revision of politics, but Britain’s deeper economic problems remain unresolved. The fact is, underneath the headlines, the country is still trying to live beyond its means, with high borrowing, weak growth and rising debt interest putting serious pressure on its public finances.