Labour versus Green

David Toke asks as Labour’s green programme shrinks should voters switch their support to the Green Party?

Set against the Government’s ever-incredibly shrinking net zero commitments, Labour’s own shrinking net zero commitments in its “Green Prosperity Plan” still look substantially better. But is this a difference big enough for environmentally conscious people to vote Labour? Or is Labour abandoning the climate struggle so much that people should go for the Green Party instead? These are troubling questions for Labour supporters. Most troubling is the fact that Labour’s programme seems to ignore the benefit of converting the nation away from using natural gas and towards use of heat pumps.

How much of an increase in green spending?

According to Ben Zaranko from the institute for Fiscal Studies Labour’s new plans represent a doubling of green spending compared to current Government plans. However, according to “Carbon Brief” the revised programme cuts the amount of new spending over and above existing Government plans by 74 per cent. That is compared to Labour’s original £28bn green spending pledge.  Whilst Labour’s plans have been lauded as being “fiscally responsible” it is worth pointing out that Zaranko said that Labour’s revised green plan “rests on the assumption that a Labour Government would implement the squeeze on public service budgets pencilled in by the present government”. Not much joy here, then.

But what is this spending going to be on? There is a Warm Homes (insulation) Plan that is set to upgrade the insulation of around five million homes. This will be slightly less than Labour’s “Carbon Energy Reduction Target” (CERT) programme set up in the 2008-2012 period. This delivered around 6.5 million pieces of insulation around UK homes. However, that is still more than ten times the recent delivery rate of the current Government’s insulation programme. Labour will establish a National Wealth Fund to help green industries such as electric vehicles and also ports to handle offshore wind construction.  However, the grants to the fossil fuel industry for carbon capture and storage schemes that have little chance of working properly are much less desirable.

Then there is the clean power plan. This is supposed to have all electricity generated from non-fossil fuels by 2030. Labour can come close to meeting this target by immediately issuing a lot of contracts to renewable generation companies. These can develop new offshore and onshore wind and solar schemes. The Government can also increase efforts to clear backlogs of transmission and distribution upgrades. Wind and solar are cheaper than power from natural gas now, and in the foreseeable future, so that is easy on the public’s finances. The proposed publicly owned “Great British Energy Company” is set to invest in some of these ventures and promote innovation in new renewables such as floating windfarms and tidal stream projects. That’s good so far, but how far does this go in meeting the climate challenge? Alas, not as much as you would think.

Heat pumps are being ignored

Electricity makes up barely a fifth of the UK’s energy demand. The majority of the rest comes from providing heating services, and that will comprise the largest amount of carbon emissions from all sources. Insulation will make a relatively small difference to that. Its main impact is an offer to consumers to reduce their bills and increase their comfort. The really big difference to cutting emissions will be if the amount of gas heating can be dramatically reduced and substituted by electric, preferably heat pump, heating. That is because heat pumps will not only use what is increasingly low carbon power electricity sources but also because it is three times as efficient in its use of energy compared to natural gas.

Heat pumps are a no-brainer for new buildings where they can be fitted at low cost, but they can be a lot more expensive in old buildings. I know, I have had one fitted! But there are a lot of places where heat pump installations are relatively cheaper (like off gas grid properties). Setting the electricity suppliers an obligation to achieve heat pump installations in such properties, as well as supporting other enthusiasts, could achieve millions of heat pump installs quite quickly. It will make the heat pump installation industry much more cost-effective as it scales up, as well. That is a big gain in our energy security (by cutting back on natural gas) without breaking the national economy.

The same story of a rapid cutback in the national need for natural gas goes for a much-needed programme to support local authorities to build heat networks so that millions of people in old houses could get power supplied from large scale heat pumps. Other local clean heat sources include geothermal sources as well as otherwise waste heat from industry and commerce. That sort of programme would begin to make a real difference.

Unfortunately, there is no discussion of such ideas in Labour’s Green Prosperity programme. The conclusion, therefore, is that however much Labour’s insulation programme may be a useful palliative, it is missing the fundamental step change in the battle to transform our heating supply system.

Nuclear black hole

Indeed, Labour may end up pouring a lot of the money intended for other types of green energy down the black hole that will open as the Government seriously starts the Sizewell C project. That project will be a terrible public spending/consumer bill disaster compared even to Hinkley C. This is because unlike Hinkley C the construction cost overruns will be borne by the UK Government and the UK energy consumers, and not by EDF. Sizewell C may not come online until after 2050. This new nuclear would in practice, anyway, make little difference to the need to balance fluctuating renewable energy supplies. Labour’s proposals mention small modular reactors (SMRs), a fantasy concept that is getting nowhere across the planet. If nuclear reactors were best small, they would not have become bigger! More wasted money!

Green Party and extra spending

The Green Party of England and Wales (GPEW), by contrast, is promising an extensive programme of green energy investment. They will say more in the forthcoming manifesto. However, in March 2023 they called for £37 billion annual spend to pay for insulation, plus a range of support measures for different types of renewable energy and replacing gas boilers with heat pumps.

True, much of it would rely on borrowing money. However, a significant portion of the funding is based on a promise to raise a new wealth tax as well as the promise held out by Labour for more windfall taxes on oil and gas. In addition, the Green Party has called for carbon taxes to fund measures, the carbon taxes to be levied on “the biggest polluters.” Avoiding spending money on nuclear power (which the Green Party opposes) will release a lot of funds for green energy compared to Labour.

The Green Party Conference Energy Policy position begins: “The aim is a decarbonised energy system based on efficient use of electricity and heat from renewable sources within the UK providing security of supply and replacing fossil fuels.” I shall go along with that! More immediately useful pronouncements from the Green Policy folio include the injunctions to “Greatly increase the use of electricity, expand the grid and develop heat networks. 

The Green Party also supports a lot more public ownership of energy compared to Labour. I certainly support the nationalisation of the domestic energy supply sector. This will cost very little for the state to buy – arguably nothing since the consumer will no longer have to pay bailouts for bankrupt suppliers. It has always been a nonsense to say that this retail supply market is competitive.

There are too many consumers to make it worthwhile for either suppliers or consumers to “compete” effectively. The notion that we should waste our time competing against each other by frequently searching the internet for best buys is stupid. There are few efficiencies to be gained even if the competition worked, which it never will. Meanwhile the “competing” suppliers are unable to organise effective management of demand to benefit the nation because they look only to their interests.

The Government has had to introduce a price cap to make sure that, among other things, consumers receive the benefit of the cheaper recently commissioned renewable energy schemes. These have been given cost-saving contracts for difference (CfDs) by the Government. Nationalising the energy suppliers would help the country plan to balance the increase in fluctuating renewable energy sources much more effectively and organise how renewable energy can serve consumer interests best.

However environmentally conscious voters cast their vote, I hope that the issue of decarbonising the heat sector receives more serious coverage. Renewable energy can ultimately solve our energy supply problems, but unless heating sources are electrified and made as energy efficient as possible then we shall be heating and emitting with natural gas for a long time yet.

As a Chartist reader get 30% off the forthcoming book Energy Revolutions – Profiteering verses Democracy (Pluto Press) by David Toke.

We can move forward to an energy system powered by renewable energy. Selective public ownership and targetted interventions, as part of an energy democracy programme will protect consumer interests better than the caotic system that failed consumers so expensively in the recent crisis.

Go to the Pluto Books webpage and quote the discount code “TOKE30” – which will take 30% off the paperback and ebook up to the publication date.

Leave a comment...

This site uses Akismet to reduce spam. Learn how your comment data is processed.