Comparing Party Manifestos on Energy Policy

One of the biggest challenges for the next government will be to ensure that the UK has a secure energy system that is both affordable and environmentally sustainable. The manifestos of the two main political parties contained many policies that have already been announced. But buried in the details of these and other manifestos, are important new proposals. There are clear differences in the speed and scale of change we should expect after the election.

Transitions at different speeds

In his speech last September, Rishi Sunak announced a change of approach to reducing emissions – with an emphasis on not going ahead of other countries, and rowing back on some specific policies (including some that had not been implemented). This approach is confirmed in the Conservative manifesto. Interestingly there are no specific dates for decarbonising electricity or phasing out petrol and diesel cars. Readers are left to draw their own conclusions about whether current commitments would remain in place. There is also a clear statement on process for the future, with the promise of a Parliamentary debate and vote on any further specific commitments of this kind.

Labour, by contrast, are much clearer. They confirm their plans to shift to a decarbonised electricity system by 2030, and to reinstate 2030 as the phase out date for petrol and diesel cars. Both are more clearly in line with legislated carbon budgets, though delivering on near-zero carbon electricity in six years will be very difficult indeed. The important question is whether there will be stronger incentives to accelerate progress towards this goal.

The Lib Dems also want to move faster. They pledge that 90% of electricity should come from renewables by 2030. Like Labour’s target, this will be tough to deliver. They also want to bring forward the target year for net zero to 2045.

Priorities for energy supplies

Labour and the Conservatives agree on two major priorities for electricity generation: both are enthusiastic about offshore wind and nuclear power – both large and small. Both parties are also positive about hydrogen, which is often over-hyped but will have an important role to play.

On carbon capture and storage (CCS), Labour make a specific financial pledge of £1bn for CCS projects. We have heard this many times before. Despite successive governments publishing plans and strategies for CCS since the mid-2000s, we are still waiting for a full-scale plant to be built in the UK. This is now closer than it has ever been, but the next government will need to work hard with industry to deliver this essential component of the pathway to net-zero.

The offshore wind commitment makes a lot of sense. It is low cost with an established pathway for continually scaling it up, and an area of UK competitive advantage. Delivering on their nuclear ambitions will be much harder. Large reactors such as Hinkley C are proving very difficult to deliver economically: it is currently under construction, over-budget and very late. Small modular reactors are put forward by supporters as a cheaper, more flexible alternative. However, until they have been built, manufacturer claims of low costs should be treated with healthy scepticism. No government should rely on them for a significant share of energy until we have more evidence of delivery. The Green Party, by contrast, states very clearly that they do not support nuclear power – a policy that places even more weight on deploying renewables on a much larger scale.

Beyond this, Manifestos diverge starkly. Labour is more committed to large-scale solar and onshore wind. They have promised to unblock planning barriers for these options and the electricity grid investment that is also needed. This would end the de-facto ban on onshore wind, which is one of the cheapest forms of new electricity generation – and significantly cheaper than the new gas plants the Conservatives champion in their Manifesto. The Conservatives remain ambivalent about onshore wind, which leaves a big question mark over the viability of this technology in England and Wales if they remain in power.

Sorting out our inefficient homes

Whilst there has been some progress with home energy efficiency under the Conservatives, there has been a significant gap in policy for the last ten years. The abolition of effective supplier obligations – which insulated millions of homes – has been followed by a series of failed policy experiments. The next government has an opportunity to build on the smaller scale policies that are working, and to learn from what works elsewhere. Many counties have more successful approaches that are focused on the needs of households – and helping them through an often baffling process, as the Energy Saving Trust and Green Alliance have found.

Whilst public spending isn’t the only answer, funding will be required to help those on low and modest incomes to upgrade their homes – with insulation and/or low carbon heating. Without this, households will continue to be vulnerable to major fossil fuel price shocks such as the one we are still experiencing. Labour has reduced its ambitions, but has confirmed an additional £6.6bn over the next Parliament. The Conservatives have not increased their commitment to energy efficiency funding beyond the £6bn over three years that was announced some time ago. Lib Dem funding plans are not entirely clear – but are similar in scale to Labour’s. The Greens go much further – and pledge £29bn for home upgrades over 5 years, funded largely by additional borrowing.

The North Sea

At first glance, the two main parties are promising very different approaches to oil and gas production in the North Sea. Labour would end new licenses, whereas the Conservatives would continue to issue them regularly. In reality, the difference between these two policies is small. The North Sea is a declining oil and gas basin. New licensing will slow that decline a bit – but is not likely to reverse it. It is therefore inevitable that import dependency for oil and gas will continue to rise unless action is taken to move households and businesses away from these fuels as quickly as possible. Many parties – including both Labour and Conservatives – remain committed to a windfall tax on oil and gas companies in some form. But Labour have promised to reduce the tax breaks built into current policies, some of which are much too generous.

Neither party sets out a coherent and comprehensive strategy for dealing with the decline of oil and gas – and what will happen to workers, infrastructures and technologies in people’s homes. The Conservatives simply state that households will not have to ‘rip out their existing boiler’.  This avoids important questions about when and how the transition to alternatives will be implemented – and who will pay. Labour do talk about the transition of skills, but both are silent on how legacy gas infrastructures will be paid for and maintained as the number of customers declines.

Delivery

Many of the technologies we will need to get all the way to net-zero are known, and some are already widely deployed in the UK or other comparable countries. The big barriers to progress in the next Parliament will be political and economic. The next government will need a serious strategy to share costs and benefits, help those who can’t afford to pay, and to manage the transition in jobs and skills.

The Conservatives have a point when they call for more political oversight of key decisions on the next stages of net zero. But this would not be entirely new: there has already been widespread scrutiny of both high-level targets and specific policies by Select Committees and other mechanisms. This also fails to acknowledge the wide array of public engagement initiatives that have already taken place – from Climate Assembly UK (a nationally representative group of 108 citizens commissioned by Parliament) to local deliberative bodies. The Lib Dems pick this up, and promise to support many more assemblies. This is one way to complement representation by MPs, and to ensure that publics are part of the conversation about the solutions to climate change, rather than having them imposed on them.

The Conservatives also include a proposal to change the remit of the Climate Change Committee (CCC) so they have to take into account affordability and security in their advice. This sounds sensible on the face of it. But, they do not mention that the Climate Change Act 2008 already includes provisions for government and the CCC to take into account wider economic, financial and social circumstances – and the impact on energy supplies - when offering advice or setting carbon targets. The Lib Dems promise a more significant change in oversight with a promise of a new Chief Secretary for Sustainability in the Treasury, coupled with a Net Zero Delivery Authority. This could help to ensure that sustainability is taken more seriously – not less.

Labour’s new publicly owned company – Great British Energy – was announced some time ago. Many of us have spent time wondering what it will do, and many suggestions have been made. For it to work, it will need to have sufficient resources, and genuinely target areas of investment where private capital can be crowded in – rather than areas where investment is already going well, driven by established policy mechanisms. The £8.3bn that Labour has committed will probably need to increase over time.

Overall verdict

Whilst we often hear arguments that the two main parties are close together – in energy policy, there are clear differences of approach and emphasis – and wider differences when the smaller parties are considered. Whilst all parties except Reform are committed to further emissions reduction, Manifestos vary widely on speed. The Conservative approach might sound more pragmatic, but the risk is that it fails to respond adequately to the alarming pace of climate change – and to fix the problem of fossil fuel dependence. Households and businesses have had to absorb a lot of financial pain. Some have been unable to do so despite government spending £90bn over two years on support schemes. Labour and other parties are promising to do more – and to spend more in some cases. But questions remain over whether this will be enough to accelerate change, reap the rewards for UK PLC – and to insulate us from the next fossil fuel price shock.

Image credit

Unsplash.com: Elliott Stallion