What would an Energy Security Strategy under Labour look like?
As green groups call for the Government and Prime Minister to introduce an emergency energy crisis meeting to tackle rising costs, the Labour Party has hinted at how it would respond to the issue, including plans for an extra windfall tax and insulating the majority of UK homes over the next decade.
With fresh forecasts suggesting that the average household energy bill could surpass £4000 early next year, green groups, citizens and researchers alike have called on the Government to intervene and protect the nation against spiralling costs caused by a hike in gas prices.
While Boris Johnson enjoys his second holiday of the summer as he winds down from a hectic time as Prime Minister, the Conservative candidates to replace him – Liz Truss and Rishi Sunak – have offered little in the way of a coherent response to the energy cost crisis.
Labour, has, however, stepped forward with a plan that it believes can save an average of £1,000 on energy costs for households this winter.
The Party’s leader Keir Starmer has claimed that it would put in place a £29bn plan to prevent the energy price cap rising again this winter.
Labour has pledged to place extra taxes on oil and gas giants, many of which have announced record-breaking quarterly profits off the back of the energy cost crisis.
Labour notably pushed for the Government to introduce a windfall tax on oil companies and while this was reluctantly agreed there are notable loopholes. Labour’s version of the tax would seek to “safeguard the people, jobs and skills that depend on the offshore oil and gas industry” while getting oil majors to cover the costs of their climate damage.
Freezing the price cap would, Labour claims, bring inflation down by 4% and make future interest rates less likely to occur.
Freezing the price cap will bring inflation down by 4%, making future interest rate rises less likely and easing the burden on households and businesses. The Party’s most recent statement also states that “further plans include a plan to secure our energy supply to make sure we’re protected against future shock”.
Additionally, Labour would seek to improve household energy efficiency through a Warm Homes Plan that would insulate 19 million homes over the next decade. Labour had called on the Government to introduce similar policies more than a year ago. Starmer claims that if it had been introduced, more than two million homes could’ve been insulated, saving those households £1,000 on average.
Keir Starmer MP, Leader of the Labour Party, said: “Britain’s cost of living crisis is getting worse, leaving people scared about how they’ll get through the winter. Labour’s plan to save households £1,000 this winter and invest in sustainable British energy to bring bills down in the long-term is a direct response to the national economic emergency that is leaving families fearing for the future.
“We’ve had 12 years of Tory government that has failed to prepare and refused to invest, leaving bills higher and our country less secure. This is a national emergency. It needs strong leadership and urgent action. Labour’s fully-funded plan would fix the problems immediately and for the future – helping people get through the winter while providing the foundations for a stronger, more secure economy. Only Labour can give Britain the fresh start it needs.”
How does it compare to the Energy Security Strategy?
In April this year, the UK Government finally published its highly anticipated Energy Security Strategy, including increased targets for offshore wind, hydrogen and nuclear power generation. This was before the most recent price predications suggested that energy bills could surpass £4,200 next year.
The Strategy is designed to help the UK respond to the energy price crisis, which is being worsened by Russia’s war in Ukraine. The Government is promising a “major acceleration of homegrown power generation” – both low-carbon and fossil-fuelled – in the first sweeping update to energy security policy in a decade.
The Government expects the measures detailed in the Strategy to result in an electricity generation mix that is 95% low-carbon by 2030. It had already pledged to ensure a 100% low-carbon mix by 2035.
Prior to the publication, media reports suggested that Boris Johnson wanted to expand the Energy Company Obligation (ECO) home energy efficiency scheme by £200m, but that the Treasury was not supportive. The expansion has, ultimately, survived into the final Strategy. BEIS expects the expansion, which will apply from 2022 to 2026, will support 133,000 low-income households annually to improve their energy efficiency.
There is also little ambition for accelerating the transition to low-carbon heat. All that has been detailed at this stage is a £30m Heat Pump Investment Accelerator Competition, designed to increase manufacturing within the UK. The Heat and Buildings Strategy – particularly its £450m boiler upgrade scheme – are highlighted.
Green groups have argued that the wrong choices are being made to cut bills in the short term while also putting the UK on course for net-zero by 2050.
Does Labour have a net-zero plan?
While the energy crisis is the most pressing environmental issue, it isn’t the only key area of the net-zero transition.
As the Conservatives decide on the next Prime Minister of the UK, the Labour Party has continuously claimed it can “reboot” the economy by catalysing progress towards net-zero. With a General Election likely to happen in the Autumn the question worth asking is “what would net-zero look like under Labour?”
The Party’s ‘30 by 2030’ report outlines plans to create a net-zero carbon energy system by the 2030s which would see nearly 90% of electricity and 50% of heat come from low-carbon sources.
The report details plans to build 7,000 new offshore wind turbines, 2,000 new onshore wind turbines, enough solar panels to cover 22,000 football pitches and new nuclear power capacity for “energy security” purposes.
Labour would also introduce plans to upgrade “almost all” of the UK’s 27m homes to the highest energy-efficiency standards, a move that, the Party claims, would reduce average energy bills by £417 per household per year by 2030 and eliminate fuel poverty. Technologies cited to help achieve this ambition include heat pumps, hydrogen and solar-powered hot water generation.
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