What (if anything) did Liz Truss do for the green economy during her time as Prime Minister?
Liz Truss has announced her resignation as Prime Minister, with a new Conservative leader to be announced next week. But what, if anything, did Truss deliver for the UK’s climate targets during the shortest-ever tenure by any UK Prime Minister?
Liz Truss was Prime Minister for just 44 days, which is officially the shortest tenure of any UK leader. Even the second shortest serving PM, George Canning managed more than 100 days back in 1827 and his tenure only came to end because he died.
Truss was dealt a difficult hand. The UK Government needed to respond urgently to the energy cost crisis, pick up the shattered notion of trust that was obliterated by Boris Johnson and the ‘partygate scandal’ while also fending off the growing popularity of the Labour Party.
A 45-day tenure suggests that the party has lost confidence in Truss’s ability to combat those swirling issues.
Labour has called for an immediate General Election, but Truss has stated she will remain in position until the Conservatives can vote on the next leader of the party within the next week. Truss claims this would “maintain the country’s economic stability”.
MPs will now put their name forward as candidates to be the next Prime Minister. Current Chancellor Jeremy Hunt has announced that he will not be putting his name forward, but speculation is mounting that former PM Boris Johnson will run as a candidate.
With just a week to pick the next PM, there’s not much time to look back on what, if anything, Truss managed to achieve for the green economy and responding to the climate crisis. But here at edie, we’ve done our best to summarise the bad, the good and the chaotic of Truss’s leadership reign.
Truss is a former Secretary of State for Foreign, Commonwealth and Development Affairs and has served in numerous cabinet roles, including International Trade Secretary and Environment Secretary. She has previously stood in the 2001 and 2005 general elections.
Truss vowed to “ride out the storm” of the global gas crisis and economic crash, but couldn’t even outlast a lettuce purchased by the Daily Star. With Suella Braverman also resigning as Home Secretary following a rant against the “tofu-eating, wokerati”, it’s been a week where greens and vegans have continuously one-upped those charged with running the country.
Fracking and fractious voting
Indeed, the tipping point for Truss and the latest iteration of this Conservative Government was a contentious legislative wrangle regarding the net-zero commitment; fracking.
Truss was very pro-fossil-fuel and largely anti-renewables during her campaign, particularly solar. Truss, who worked for Shell between 1996 and 2000, indicated that she was against the current windfall tax on oil and gas majors and stated that she would allow fracking in areas where local communities support it. She has also made headlines during campaigning with talk of approving more than 100 new oil and gas licenses in the North Sea – a proposal slammed by climate scientists.
The Government defeated a Labour motion that forced a vote on whether fracking should be banned in the UK late on Wednesday (19 October). Labour introduced the motion on Wednesday, stating that all MPs, regardless of party, should be given the opportunity to cast a vote on whether fracking should be banned in the UK. The motion was defeated by 326 votes to 230, in a move that sees the Conservative Government abandon one of the key pledges of its victorious 2019 election manifesto.
The Conservative Government imposed a moratorium on fracking in 2019 because companies leading extraction projects could not prove their ability to operate below a threshold for tremors they had previously agreed to. The Party’s manifesto also pledged to “not support fracking unless the science shows categorically that it can be done safely”.
Many Conservative MPs chose not to support Party policy and vote in line with Truss’ wishes that the motion be voted down, sparking confusion over resignations of key cabinet members and accusations of manhandling and bullying in order to get some MPs to vote.
While that issue may well have been the straw that broke this camel’s back, Truss’s short time as Prime Minister has been tumultuous, chaotic and filled to the brim with u-turns.
Energy relief and mini-budget sinks the pound
Truss appointed former Business Secretary Kwasi Kwarteng as Chancellor and then chose climate-sceptic Jacob Rees-Mogg to step into the crucial role vacated by Kwarteng.
When Liz Truss and Kwarteng outlined her immediate plans to deal with the energy crisis, she confirmed that the Government will provide “equivalent guarantees” for energy prices for businesses for at least the next six months. This meant businesses would see their energy costs capped at the same price per unit that households will pay. This will then be reviewed within the next three months and Truss added that the Government would work beyond the six-month timeframe to support vulnerable sectors like hospitality.
Those measures include a new price freeze on household energy bills, effectively eliminating the £3,549 price cap due to come in October. Instead, the price cap has been frozen at £2,500 for the next two years from 1 October, which the Government believes will deliver a “pro-growth, pro-business and pro-investment approach for the country’s energy security”.
Many green economy representatives asked why it had not been paired with other measures, like a new national home insulation scheme. All of these seem to feed into Truss’s view that the UK’s net-zero transition should be “pro-business and pro-growth”, using a different approach than those previously recommended by the Climate Change Committee.
Business Secretary Rees-Mogg then unveiled a Government Energy Bill Relief Scheme via a press release, instead of the traditional method of explaining the new scheme to MPs in the House of Commons.
The Department for Business, Energy and Industrial Strategy (BEIS) claimed that the Government has introduced a new support price of £211 per MWh for electricity, compared to a projected price of £600 per MWh and £75 per MWh for gas compared to a projected winter price of £180 per MWh.
The new pricing, which will be applied in pence per kilowatt hour (p/kWh), is available to all non-domestic energy contracts, including businesses, voluntary sector organisations, such as charities and public sector organisations such as schools, hospitals and care homes.
Energy u-turns for economic ‘security’
However, these introductions appear to be short-lived, and could still be up for further review following the Prime Minister’s resignation.
Kwarteng was ousted and replaced by new Chancellor Jeremy Hunt, who has since confirmed that plans to protect all British homes from rising energy prices, originally set to have run until October 2024, will now be reviewed in April 2023.
Hunt was appointed Chancellor late last week after Prime Minister Liz Truss sacked Kwarteng from the role. The decision was made after the measures announced in Kwarteng’s uncosted mini-budget led the pound to plummet.
As expected, Hunt announced the reversal of several measures first announced by Kwarteng. Basic income tax rates were due to be cut from 20% to 10% in April 2023. This plan has been shelved and will “only take place when the economic conditions allow for it”. Also shelved is a planned freeze to alcohol duty rates.
A treasury-led review will be conducted to ascertain what will change about the energy relief scheme after the new end date of April 2021, in order to deliver a scheme that costs less. Hunt hinted that the changes will result in a more targeted scheme, with those most in need receiving a bigger subsidy towards their bills.
Also up for review will be the Energy Bill Relief Scheme for businesses. This was only intended to be in place, in its current form, for six months. The Treasury will now develop a next stage – again to be implemented from next April.
One of the more worrying trends of the previous leadership campaigning – which lasted 10 days longer than Truss’ time as Prime Minister – were the murmurs that some candidates would move to lessen green legislation around efforts to reach net-zero by 2050.
Truss and her Government did confirm that net-zero would remain a legislative climate commitment. Indeed, the Government has kick-started a new ‘net-zero review’, with Chris Skidmore MP, who is heading up the review, repeatedly stating that the UK will keep the 2050 date but explore different ways of delivery. Skidmore posted on Twitter earlier on Wednesday that he would not support the fracking vote.
Businesses and other organisations have until Thursday 27 October to respond to the UK Government’s Net-Zero Review. The Call for Evidence can be accessed here.
Skidmore has repeatedly stated in public that the intention of the review is not to water down the UK’s legally binding long-term target but to map a clearer path to its delivery and ensure that the economic opportunities are captured. He has stated: “I want to ensure that net-zero isn’t just viewed as the right thing to do for our environment, but becomes an essential driver of economic growth – and a win-win for Britain and the world.
However, MPs have also reported no progress in the update of the Net Zero Strategy, which was mandated by the High Court earlier this year after it ruled that the Strategy is unlawful. Business and Energy Secretary Jacob Rees-Mogg confirmed this week that his Department will not be challenging the ruling.
So, any positives?
The reiteration that net-zero would remain the direction of travel was welcome certainty to the green economy and while efforts to combat the energy crisis were needed, they haven’t been executed well. There are very few snippets of Truss’s brief leadership legacy that will raise spirits for those trying to champion the net-zero movement.
Truss is the UK’s shortest-serving Prime Minister and dealing with the economic backdrop of the energy cost crisis and geopolitical uncertainties of the war in Ukraine would be no easy task for any leader. However, her time as PM will not be remembered fondly for the uncertainty it has placed on the UK’s economy, and therefore any attempts to transition to a green economy as part of the net-zero trajectory.
Truss and her Government did, however, outline plans to scrap restrictive legislative around onshore wind, which has effectively banned the technology in England since 2015. Truss outlined plans to bring onshore wind “in line with other infrastructure to allow it to be deployed more easily in England”. This was described by climate campaigners as one of the “few bright spots” in that much-maligned fiscal package from ex-Chancellor Kwarteng.
Onshore wind is viewed as a crucial technology to help the UK reach its climate targets.
Last year, RenewableUK urged Ministers to set specific, legally binding 2030 targets for renewable energy generation to help deliver its net-zero target, including growing the nation’s onshore wind capacity to 30GW.
The report argues that Boris Johnson’s vision for the UK to host 40GW of offshore wind by 2030 should be matched with equally ambitious targets for onshore wind, marine energy and green hydrogen.
On the former, it recommends that the UK commits to hosting at least 30GW of onshore wind by the end of the decade, up from 13.7GW in 2020. New onshore wind arrays were essentially banned in the UK under Contracts for Difference (CfD) rules that came into force in 2015, but a reform in 2020 has made it easier for developers to find a route to market.
So, what happens next?
Truss will stay in position for the next week at least, as the Conservatives again scurry to name the next leader of the Party. This person, which could be former Prime Minister Boris Johnson who is expected to stand, will then aim to pick up the economic mess that consecutive leaders have contributed to.
The new leader will be named just days before the Government’s next fiscal statement at the end of October, which could reiterate or tear up the announcements and amendments issued in the mini-Budget at the start of the month.
Labour and the opposition will get even more vocal in their demands for a General Election to be called, with the party performing particularly well in the polls.
As the Conservatives decide on the next Prime Minister of the UK, the Labour Party has claimed it can “reboot” the economy by catalysing progress towards net-zero.
But what would a net-zero strategy under Labour look like? While the specifics are likely to be updated if Labour were to win a General Election, the party has long campaigned for more ambitious approaches to climate action. Read more here.
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We have the old problem of generally scientifically illiterate politicians having a large influence on scientific and technical matters.
A degree in Politics Philosophy and Economics is not, perhaps, the best guide to optimum system for the generation of electricity.
I am sure that the PPE course is most interesting, but so is Bertrand Russell’s “A History of Western Philosophy”.
Horses for courses is not a bad Maxim!