Can Labour solve its policy problems?

Of course it’s vulgar to boast about one’s achievements but I hope I may be forgiven this time. My predictions for the oil price, gas price, petrol price and COP28 in 2023 were all pretty much spot on. Not perfect but close enough. This is a rare – for me – achievement and I have learnt my lesson as my predictions don’t change much for this year. I think the prices you see today are likely to be the prices you see at the end of the year. If not, that will either be because of a major geopolitical catastrophe on the downside or economic recovery on the upside. Let’s hope it’s the latter. 

There is, however, one caveat: we may see a natural gas glut this year which would push prices down to pre-Covid levels which really would be a massive relief all round and a spectacular demonstration of Vladimir Putin’s strategic ineptitude. Among everything else, he’s managed to gift his share of the world’s LNG market to the US. Somehow I don’t think this is what he intended when he invaded Ukraine. What a putz!

My Mystic Meg credentials have been further burnished by my mid-2023 observations around Keir Starmer’s £28 billion green energy plan which have been proven correct: a policy that was never remotely serious is currently being carefully smashed to pieces as it slams into political and economic reality. And the irony is, of course, that it’s Labour itself that’s doing the smashing as they talk about what the £28 billion actually means and when it might actually be borrowed and spent.

This was utterly inevitable. Removing gas from the UK’s energy mix by 2030 is completely impossible for a number of fundamental reasons; building wind turbines and solar panels in the UK would be commercial suicide; carbon capture and storage technology remains at the starter’s gate. I could go on but the collapse of this policy is concerning for all of us as it speaks to a lack of due diligence and attention to detail that was obvious to anyone in the energy sector. I mean, who on earth are Starmer and Miliband talking to in the sector? There are plenty of Labour-supporting people within the energy industry and vast amounts of policy expertise available to Labour, not least in the unions who have plenty of credible insights both into what’s going on within the industry and what the industry thinks needs to happen yet. Ask the workers, Sir Keir, and you might learn something.

After all, at heart, Labour’s policy goals make sense, although I know plenty who will disagree with me on that. The Labour party has successfully identified the correct destination, but the route they have so far chosen to get there felt as if it was designed by Tony Benn. An interventionist, state-driven, debt-funded exercise which will, fortunately for us, never get off the ground. Something that has been relegated to the “second half of the parliament” is not going to happen in any meaningful sense. As I say in the Giga Watt household: “Yes, children, we will go to Disneyworld on holiday but it’s more likely to be in the second half of this Parliament.” See?

So what will Labour do instead? Well, as discussed, they still have credible and urgent policy goals that they will want to meet but, as they have admitted, have no money to meet those goals. However, some readers will recall that Tony Blair also had no money when he started out in 1997 – remember Ken Clarke’s spending plans that Blair pledged to stick to? – but in his first two years in office he did plenty of things that changed the face of this country, yet they cost very little. 

Starmer may well feel and, frankly, should feel that he can do much of the same: that means fixing restrictive planning laws, implementing consistent taxation across the sector that potential investors can trust, carefully introducing incentives that will drive growth, recognising the massive skills base that we can benefit from and, this may stick in Labour’s craw, building on the inheritance that the current Government is going to gift them both in terms of the progress this country has already made and the policy framework (which I have lauded before) that they have put in place. To corrupt the old Irish saying, on asking for directions on what to do next, they won’t go wrong if they’re happy to start from here. 

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