Sunshine on Leith - it’s the green economy, stupid!

This article is by our Director of Public Affairs, Gerry McFall. You can email him here.

It was no accident that Sir Keir Starmer launched the fourth of his ‘five missions’ to Make Britain a Clean Energy Super Power by 2030 in Leith, the now leafy and regenerated buzzing port suburb of Edinburgh. Energy security and geopolitical concerns are central to the policy of course, but one of the policy’s missions is a local clean power plan that will use Great British Energy (GBE), a publicly owned company managing the investment for all forms of renewable energy, to be based in Scotland. 

GBE, which was announced in September 2022 will target investment in local projects and return profits to local communities and councils and provide low-interest loans for green projects across the UK. 

There is no competitive bidding for GBE. This is a purely political calculation after his ill-conceived and economically incoherent announcement to block all new oil and gas development licences in the North Sea two weeks ago - a defacto attack on Scotland’s largest industry. 

Labour has benefited from the SNP’s infighting and legal woes and with polling between the two now almost neck and neck, there needs to be a laser-sharp focus on all things Scotland. So, after a stumble on oil and gas, Starmer had to correct the folly of his headline announcement two weeks ago.

By that we mean heavily caveat, or at least explain the announcement (note not policy) to end new North Sea oil and gas exploration, in order to calm trade union and investor jitters who had not been consulted. The GMB and Unite unions (two of Labour’s largest funders) waded in heavily on Starmer about the tens of thousands of industry workers in Scotland and others working downstream in the petrochemical industry who would lose their jobs before the green energy transition can be made. Frantic phone calls were made to industry such as Equinor - which is 67% owned by the Norwegian government - who are imminently expecting an announcement on the Rosebank oil field off the coast of the Shetland Islands, to reassure them.

One would imagine there is a lesson learned about tackling complex industrial change, you need to consult and explain and include stakeholders in the policy-making process. Given that even the Climate Change Committee acknowledge that gas will be part of the energy mix for the foreseeable future and there is a huge amount of non-energy related products that come from oil, today’s further reassurances by Starmer will have tempered the trade unions, safe in the knowledge that workers don’t pay the price for the transition to renewable energy - it will be a managed and ‘just transition’ as Starmer set out.

There were a number of significant statements of intent in the speech: reduce the time projects take in planning from years to months by introducing targets for consenting decisions with a new designated directorate in government to ensure departments remain on track (which have been tried before of course with ‘project speed’); stop ‘zombie’ developments that are in the queue for grid connection and prioritise projects that are ready to connect to the grid; and that every regulator has a net zero mandate, presumably from the Civil Aviation Authority, OFWAT to the Financial Conduct Authority. 

Today’s launch was more of a repackaging of existing announcements into a retail offer of good jobs and more money in your pocket. Planning was re-focussed from housing to onshore windfarms, leveraging the state’s role in procurement, a strategic framework for institutional investors on green infrastructure investment - all previously trailed in different contexts.  

In reality, there is a lot of smoke and mirrors going on here. Starmer is not being bold, merely pragmatic. ‘Progressive’ political parties globally are irrevocably committed to a net zero transition and all the many layers and complexities it entails. His opposition to granting new oil and gas licences is illusionary, the Labour Party members demand it, Just Stop Oil demands it, Guardian readers demand it and Starmer knows it. The question has always been one of how to manage it.

Gone is the banal Fairer Greener Future slogan with the ideas of a green rose ditched - now it’s about the distilled five missions for Building a Better Britain. Today was all about a shift in tone on policy and election strategy. Reindustrialisation was central to it and mana from heaven for the trade unions who want jobs and the cost of living crisis at the heart of the election strategy. Today brought that argument back to the central point of where the election must be fought and won and where the voters are - it is a recalibration on semantics, not policy. 

The economy is stagnant. Families are working harder for less money and losing ground to inflationary pressures. The green agenda has always had a middle class aura to it despite attempts to use the language of inclusivity, social justice and fairness it has never quite been able to cut through despite almost universal recognition of the importance of climate change. It looks like Starmer is beginning to recognise this - there has simply never been any sustained demand for climate action when the voters feel a negative economic impact.

The consequences are still unclear about the long-term effects of not issuing new North Sea licences, but Starmer is at least finding the language to communicate that being ‘green’ is good, just, and economically makes sense. It marked the political reframing of the green agenda tied to an election strategy that puts jobs and tackling the cost of living crisis at the centre of the election battleground.