Labour are damaging the cause of climate action

Ed Miliband used a wide-ranging party speech today at Labour Party Conference to rail against opponents of climate action. Nigel Farage and Reform UK bore the brunt of his attack for their hostility to clean energy. 

Sam Hall | Director

But the Energy Secretary continues to be completely oblivious to his own role in fuelling polarisation around climate change.

It is certainly true that Reform’s approach of ignoring climate change, downplaying the risks and hoping the worsening floods, droughts and coastal erosion all go away is reckless and irresponsible. Their statist energy plans to ban and tax clean technology, tear up private law contracts and impose inheritance tax on farmers who diversify into renewable energy lack any credibility, and will only push up bills and make us less energy secure.

But Miliband’s policies are also undermining the consensus on climate change, while increasing energy bills and risking our economic prosperity.

His myopic rush to decarbonise the grid by 2030 is profoundly damaging to climate action. 

He wants to lock bill-payers into expensive 20-year subsidy contracts, when capital and supply chain costs are at historic highs. He wants to squeeze out competition from renewable energy auctions, by offering to pay developers whatever it takes to hit his arbitrary target. And he turns a blind eye to the rising costs for balancing the supply and demand of electricity, as he switches on new generation energy before the necessary grid upgrades have been carried out to bring the power to where it is consumed and prevent energy being wasted.

As a result of these factors, we will almost certainly see higher electricity prices. Of course that will be bad for households struggling with the cost of living and for industry trying to compete. But it will also harm our climate efforts. 

More expensive energy will toxify decarbonisation with the general public. Even more substantially, it will make switching to electric cars and heating – vital for decarbonisation – less appealing and cost-effective for consumers.

Significantly cheaper electricity would turbocharge electrification and help us decarbonise faster. This would be a much better climate mission than clean power by 2030. 

There was never a strong case for Miliband’s decision to accelerate plans to decarbonise an already very clean power sector. The Climate Change Committee has been clear that clean power by 2030 is not necessary for reaching net zero by 2050. The committee has made cheaper electricity their top recommendation for the Government in their recent reports.

But far from pausing to consider the wisdom of his target, Miliband instead doubled down in his speech with a flurry of ideological rhetoric and policies.

He announced that Great British Energy would fund more solar panels on schools and hospitals. Solar does save money on bills, but it can and should be financed privately. Getting a state quango to finance these projects is a waste of limited taxpayer funds that would be better used for lowering taxes and levies on electricity for everyone.

He also set out plans to incentivise renewable energy companies to increase access to trade unions for their workers through energy bill levies. This will mean higher labour costs, which will increase renewable prices. It will mean higher levies. And it will ultimately mean higher electricity prices. 

Yet the clean energy supply chain needs cheap electricity to compete and thrive. Energy is a significant input cost for manufacturers of the components of clean technologies. Ironically, this policy will make the UK a less attractive destination for international clean energy supply chain investment, reducing the number of well-paying jobs in the UK from the transition. The best green industrial policy we could have is cheap electricity, not taxing everyone’s bills to hand out subsidy cheques to a handful of favoured companies.

The ideology wasn’t confined to his policies. His wider rhetoric was deeply unhelpful too. The relentless attempts to tie climate change to other progressive causes – from strengthening workers’ rights, to attacking billionaires – alienate conservatives from environmentalism and reinforce the damaging perception that climate is solely a left-wing issue.

Next week Conservatives will gather in Manchester for their party conference. They should remember that it was Margaret Thatcher who first warned about climate change on the world stage, and who also warned about the risk of the agenda being taken over by socialists. We should heed her words, and reject the socialism and ideology of both Labour and Reform when it comes to energy and climate change. 

First published by CapX. Sam Hall is Director of CEN.