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Madano Analysis – Net-Zero leads Labour Party Conference

By Ben Gascoyne, Senior Account Director, Net Zero Transition
By Ben Gascoyne, Senior Account Director, Net Zero Transition

Today is the close of Labour Party Conference 2022, and yesterday we saw Keir Starmer take to the stage in Liverpool to give his biggest speech of the year.

Comfortably ahead in the polls and with new PM Liz Truss dealing with an immediate and highly damaging backlash bordering on crisis following the launch of her flagship Growth Plan last week, Keir Starmer and Labour sought to present itself as the Government-in-waiting, with a clear and credible plan for power and prosperity. Starmer’s leader’s speech contrasted his party’s focus on long-term improvement and planning with what he portrayed as the current Government’s short-term crisis-to-crisis footing.

On the ground, our team noticed Labour’s confidence and belief in its ability to return to power.

Unequivocally, Labour is behind net zero, a theme that underpinned many of its major policy announcements, including its Industrial Strategy, transport policy and commitment to a new publicly owned renewable energy company. Keir Starmer said that “Clean energy is already cheaper than fossil fuels. Nine times cheaper. We just need more of it. This is about fair growth powered by clean British energy everywhere in the country.”

Labour consistently referred to net zero as a policy agenda that would deliver for the public, for industry, and for workers, and will expect businesses to take note.

What is clear is that Labour wants to hear from business and understand how sectors can deliver its vision in practice. The big picture is set, but detail is needed. By 2023’s Labour Party Conference, its manifesto will have begun to take shape and its agenda for power set. Having met and spoken with Labour’s shadow ministers, advisers, think tanks and party members over recent days, our strong advice is to begin communicating with Labour’s top team sooner, not later.

Labour’s new Industrial Strategy – Prosperity through Partnership

The Shadow Business Secretary, Jonny Reynolds launched a new Industrial Strategy – Prosperity through Partnership - to anchor how Labour works with industry and approaches growth if it wins the next general election.

Reynolds plans to establish a statutory, full-time and professionally staffed Industrial Strategy Council, a body to advise Government on long-term industrial policy opportunities, with an obligation to report to parliament. This will require legislation, but this will make it harder to abolish than Theresa May’s politically appointed version, which Boris Johnson did within three years of its establishment.

Fundamentally, Labour has aimed to make the case that it will increase spending, but will do so to adopt a strategic approach to investing in the UK’s green economy, in an effort to contrast itself with the new PM’s focus on tax cuts and deregulation.

The word ‘partnership’ is important to note - Labour expects its support for business to yield improved productivity, pay, working conditions and future-proofed jobs that are equitably spread across the country. Keir Starmer said “this will require a different way of working – the biggest partnership between government, business and communities this country has ever seen.”

Significant Industrial Strategy policy commitments

Labour’s Industrial Strategy sets the mission of a 100% clean power sector for the UK by 2030, on the basis that this will deliver economic gain, energy security and climate benefit. Hydrogen and the nuclear sector – including SMRs - feature prominently, as does a clearer commitment to solar power than the Conservatives. The detail of how this is delivered is yet to be set.

Additionally, it also sets the mission of the harnessing of data for public good, meaning the use of data science, open data and artificial intelligence to benefit society. Labour expects to leverage this to improve public services and key aspects of public life.

It has put in place four pillars – sovereign capabilities, global champions (exports), future successes (start-ups and scale-ups) and the everyday economy – to help assess its approach to investing and targeting interventions within those four missions. It is running an active policy commission to explore how it can improve the UK’s environment for start-ups, spinouts and scale-ups.

The bedrock of Labour’s Industrial Strategy is an £8bn Green Investment Fund. This was announced by Shadow Climate Secretary Ed Miliband and his team (including Shadow Climate Change and Net Zero Minister, Alan Whitehead, who spoke at Madano’s event with Hydrogen UK), and will seek to co-invest alongside the private sector to accelerate progress towards its policy aims while delivering returns for the taxpayer.

Hydrogen amongst other forms of renewables appeared very prominently in speeches by Keir Starmer and Ed Miliband, with Starmer saying that “Some nation will be the first to harness new hydrogen power. Why not Britain?”. Both Miliband and Starmer also confirmed Labour’s support for new nuclear in their speeches.

Elsewhere at Labour’s Party Conference, the Shadow Chancellor Rachel Reeves also pledged to support the Scottish Cluster’s plans for carbon capture.

Great British Energy

Keir Starmer made headlines on Tuesday by announcing that he will establish a new publicly owned renewable energy company, Great British Energy. Madano noted how well received the announcement was by party members on the conference floor.

The new company is expected to be modelled on France’s EDF, or Sweden’s Vattenfall, but will solely focus on renewables with the aim of establishing the UK in Starmer’s words as a “clean energy superpower”, with greater energy independence. He said that net zero is “at the heart of modern, 21st century aspiration”, and that Britain had wealth in “our air, in our seas, in our skies”, so should “harness that wealth and share it with all.”

He criticised the extent to which the UK’s current renewables were owned by overseas state-owned firms, with the rise in UK energy bills rewarding other state-owned energy companies.

To make this significant policy commitment possible, Labour aims to seed fund a £2bn publicly owned renewable energy company, but again, how this will be delivered remains to be detailed.

A more confident approach to transport policy

The focus on net zero also offered Labour the opportunity to begin putting in place a more confident approach to transport strategy, after difficulty earlier in the summer determining the party’s position on industrial action.

Making the case that a poor public transport system made net zero undeliverable, Labour’s Shadow Transport Secretary Louise Haigh has pledged to:

  • Renationalise rail. Highlighting existing public subsidy for rail operators in contrast to current crises across the rail network, Haigh has committed Labour to taking public control of rail. What this looks like in practice, particularly given Government plans to establish Great British Railways, were not fully detailed.
  • Invest in rail and low carbon infrastructure to support Labour’s net zero aims, although Northern Powerhouse Rail was the only project highlighted.
  • Further devolve control over public transport. Labour committed to greater devolution of regional public transport services, with a commitment to nationally expanding the devolved bus franchising powers recently won by the Mayor of Greater Manchester, Andy Burnham.