Andy Burnham has disappointed on energy policy again. The departure of Keir Starmer as prime minister and Ed Miliband’s move from the energy brief seemed like good news for fans of affordable and secure energy. Yet as Starmer’s successor, Burnham is delivering continuity rather than change on energy, as on much else, and he has reaffirmed his commitment to achieving Net Zero by 2050. Whatever his rhetoric, the UK alone reaching Net Zero simply isn’t going to solve a global problem like climate change. Find out more below – my piece of the week is by Sean Ridley, who looks at what Burnham could be doing if he were serious about energy.
Elsewhere, Ben Ramanauskas wrote about US officials criticising their UK counterparts over digital policies like the Online Safety Act. He argues that, while the laws are neutral on paper, the US sees them as discriminatory because their burden falls almost entirely on American firms in one of its most important export sectors. Hard as it may be to admit, this is one trade fight where Donald Trump is in the right.
American firms dominate the tech industry and so almost any domestic digital regulation a foreign government passes will land disproportionately on US companies
On the home front, James Mackenzie Smith argues that the state’s aversion to risk is smothering growth, and that Britain’s tax code – one of the longest in the world at more than 20,000 pages – absorbs too many resources in compliance and distorts economic decisions. A new report from the Reform-linked Centre for a Better Britain, where he is head of policy, calls for reducing corporation tax from 25% to 15% and abolishing capital gains tax. Its recommendations may be politically difficult, he argues, but are necessary to attract investment again and raise the standard of living.
Sounding similar themes, John Penrose argues that we need to emulate India and break free of our stifling ‘licence raj’. India’s bureaucracy-slashing reforms of the 1990s unleashed a tidal wave of growth. The first step, he says, is to replace site-by-site permissions with predefined standards for everything from environmental quality to safety. Shanker Singham wrote on why Poland must join the G20. He argues Poland is an ideal candidate because of its rapid growth over the past two decades and its growing strategic weight as a security anchor in Europe. With the US in favour and holding the G20 presidency, he says December’s summit in Miami should be the moment.
On The Capitalist this week, CapX’s editor Marc Sidwell sat down with Chelsea Follett of the Cato Institute to discuss her new book, ‘The Grim Old Days: An Introduction to the Preindustrial Past’, which will be published next month. It sets out what life was really like before modern economic growth. They discussed why the fantasy of cosy village life is so persistent and how it feeds today’s scepticism about growth and AI. They also covered why the pre-industrial world was no environmental idyll, and what passed for entertainment when an execution was a family day out.
Oscar Gill-Lewis
Deputy Editor, CapX
Burnham needs to get serious on energy
Sean Ridley
It’s not often that a Labour announcement reminds you of music. Reading Andy Burnham’s confirmation of his commitment to Net Zero in the Guardian last week, I couldn’t help but think of The Who’s 1971 epic rocker ‘Won’t Get Fooled Again’.
Within it are the lyrics:
‘And the world looks just the same,
And history ain’t changed…’
Keir Starmer may be gone and Ed Miliband moved on to the Foreign Office but unfortunately the Net Zero song remains the same. Within his statement, Burnham said he is ‘determined’ that Net Zero be reached by 2050, announcing £30 million in funding for municipal renewables projects, or what he dubbed ‘People’s Power’ projects – a name Marx could be proud of.
Our current path towards Net Zero is increasingly visible as an economic folly
The rhetoric is grand but the statement offers nothing in terms of new policy. It is effectively a rebrand of Ed Miliband’s Local Power Plan, a key operational arm of Great British Energy (GBE) that has seen its scope reduced as GBE’s original budget was cut back and the cost of the UK’s small modular reactor programme was lumped in. And as the CPS discussed in its paper, ‘Power to the Markets’, the sums allocated are piddling. Bill reducers they are not.
Here was a moment for Burnham to really stamp his authority and show some leadership by admitting that the national circumstances have changed and it’s now time to pursue a different approach to decarbonisation. No one who spent this last summer in the UK can deny that the climate is changing, but our current path towards Net Zero is increasingly visible as an economic folly, and the unfortunate reality is that, when it comes to mitigating adverse climate effects, the solutions lie outside the UK’s control.
Burnham may have given a subtle nod to adaptation, stating that the country will have to change ‘the way… we build homes and produce energy’ but that’s a line any primary school kid could have given you back when ‘An Inconvenient Truth’ was still all the rage. (He also included the way we all travel, but as the Climate Change Committee’s view this week on an extra runway at Heathrow showed, this really means returning us to an age when air travel was the preserve of the wealthy, pricing you, dear reader, out for nothing other than being too common – sorry, polluting – for your own good).
He recognised the dangers of the extreme heat we have faced this summer but said nothing of our current building codes that put air conditioning below passive cooling methods in a so-called ‘cooling hierarchy’. Nor did he mention that air-to-air heat pumps, which can provide cooling as well as heating, are eligible for only a third of the grant offered to air-to-water and ground-sourced heat pumps under Labour’s own Boiler Upgrade Scheme.
If Burnham was truly serious about making our energy secure and affordable, rather than fiddling at the margins, here’s what he could have done differently: he could have announced that he was going to approve the Jackdaw and Rosebank oil and gas fields – because they will boost domestic energy production far more than any municipal project can. He could have announced that there will be no further renewables allocation rounds – because households will be footing the bill for them for the next 20 years. He could have announced that the UK will be taking a more R&D-led approach to decarbonisation instead of Net Zero – because at less than 0.8% of global emissions, the UK alone reaching Net Zero simply isn’t going to solve a global problem like climate change.
But he announced none of those things. And that’s not including the likes of carbon taxes and other pieces of climate policy that are past their use-by date.
Unfortunately, it looks like the climate policy we had under Keir and Ed is set to continue as is under Andy Burnham. To quote The Who again, it looks to be a case of ‘meet the new boss, same as the old boss’.
And if you want more…
– AI regulation offers Britain no safety (Sam Williamson)
– The private sector can take Britain back to the stars (James Price)
– How to make gas storage competitive again (Juno Chowla-Song)
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He is continuity Corbyn, stability Starmer. Nothing changes with the leftist mind: all alternatives, any dissent from progressive shibboleths are evil and this easily discounted, as are those who express them. How the Left loves to “other” its opponents.