Starmer’s contradictory energy policy exposes a doctrinaire Labour party

So today is the day that Labour has launched its manifesto. Keir Starmer said there would be no surprises, no rabbits out of hats and while many of us might welcome his unflashy, sensible ways of doing business, it turns out that there are surprises in the manifesto and on energy in particular. 

The column has looked at the Great British Energy (GBE) policy many times and it’s no better now than it was before: suffice to say that the manifesto provides no clues as to why Ed Miliband is more qualified than anyone else to “shape markets” and “use public investment to crowd in public spending” in the energy sector. We can be certain that Tony Benn would be delighted by the prospect of such heavy-handed intervention. Thank goodness, it’s £8bn over the life of the parliament rather than the £28bn it used to be.

So the surprise is not that the GBE white elephant sails on but that the rest of Labour’s energy policy has become more incoherent: on the one hand, “Labour will maintain a strategic reserve of gas power stations to guarantee security of supply” but on the other hand, it will not issue “new licences to explore new fields because they will not take a penny off bills”. They also want to increase the Tories’ windfall tax and remove “unjustifiably generous investment allowances”. At the same time, Labour says that the “North Sea will be managed in a way that does not jeopardise jobs. And our offshore workers will lead the world in the industries of the future.” To which the only response can possibly be: “Can I have some of whatever you’re smoking?”.

This is not hard to critique: if you think that oil and gas is going to be part of the energy mix for years to come in the UK and you are going to continue using (and likely commissioning) new gas-fired power stations – bearing in mind that, on a dark, cold, windless night in winter, demand for power in the UK can get as high as 45 Giga Watts – why would you do everything you can to decrease investment in your own oil and gas fields by not issuing new licences and removing incentives to invest? 

Once you have successfully decreased investment, which this plan will certainly do, your “brilliant” workforce is no longer going to exist and so cannot take on these new jobs that you want to offer them. The contradictions across the policy are myriad and, again, speaks to a party that is far more doctrinaire than they have let on so far. Starmer and co just don’t trust the private sector and it runs through their energy policy like letters in a stick of rock. For Labour, energy is government business and the private sector can get knotted. We shall just have to hope Sir Humphrey can successfully water down its foolish policy because if he doesn’t, the North Sea will be moribund in just a few short years.

But Labour’s incoherence is also flippant: this perspective that opening new gas fields would not take a penny off bills is a good example. How on earth can that possibly be true? It smacks of a junior copywriter on the Labour team getting carried away with their own rhetoric. If an exploration company made a major find in the North Sea, it is possible that it might bring down the cost of gas (and therefore bills) by increasing European gas supply. It might not be much but the market is currently very tight so new supplies could, in theory, make a difference. Conversely, what we can say for certain is that, in a world where the UK continues to use gas for its baseload power, not having access to your own resources just a few miles of your coastline, will unquestionably put your bills up and make you wholly reliant on those same global gas markets that went haywire after Russia invaded Ukraine.

Labour’s energy policy has lots of good intentions and they have, as this column has said before, successfully identified many of the problems. However, today’s manifesto is poor stuff to the extent that, if you’re currently working in North Sea oil and gas, you should take this free piece of advice: it’s time to get moving on LinkedIn. 

Write to us with your comments to be considered for publication at letters@reaction.life