The UK has more than its fair share of looming infrastructure priorities.
There’s a neglected water network that leaks sewage into rivers and clean water into the ground. A rail system in disarray after the last-minute scrapping of HS2. Not to mention roads filled with enough potholes to swallow fleets of electric cars there aren’t enough charging points to run.
All are addressed in the second five-yearly review of the UK’s key strategic priorities by the National Infrastructure Commission (NIC).
But the main priority, it concludes, is to electrify the heating of the UK’s 29 million or so homes.
As Sir John Armitt, chair of the NIC told me with a smile: “It’s literally all hands to the pumps, in this case the heat pumps!”
The main reason, according to the NIC, is one of urgency.
We have just about run out of time to switch away from gas before we miss legally binding targets to cut carbon emissions by 2035.
Image: A heat pump at a German factory
But there’s also the economic opportunity in that heat pumps promise to reduce heating bills almost immediately, and halve them by the time we get to 2050 (the NIC forecasts).
Then there’s the added bonus of not being dependent on gas.
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That doesn’t just avoid climate risks, but also the ridiculous price volatility of gas which, but one estimate, cost the UK economy £50-60bn extra between early 2022 and early 2023.
For infrastructure folks heat pumps are exciting.
Because they just move heat from one place (typically the air outside your home) and concentrate it in another (your radiator/hot water tank) they’re 3-5 times more efficient than a gas boiler. And when powered by wind, solar or nuclear power, they have negligible carbon emissions too.
For the time being at least they are on average (according to the NIC report) £10,000 more than a gas boiler to buy and install, and require a fairly energy efficient home.
But, as the NIC outlines today, with a couple of decades of subsidy for heating – just as subsidy helped the shift to clean energy generation like wind power – the switch can be made.
Consumers benefit from lower bills and a planet their grandchildren can live on.
Not everyone sees it that way of course. Companies that run the gas networks and make traditional boilers hardly welcomed the NIC’s key recommendation.
One thing they liked even less was the conclusion there was no place for hydrogen in heating people’s homes (compared to a heat pump, burning hydrogen is 5-6 times less efficient and far more expensive, the NIC found).
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The possibility of replacing natural gas with hydrogen allowed the existing gas industry to offer “hydrogen ready” boilers and a possible future for their products.
The NIC is urging government to stop flip-flopping around hydrogen (except for industrial uses) and go all in on electric heat.
The big question is of course whether this government, or the next, takes on the NIC’s heat-pump challenge.
Can they afford the billions in annual subsidy costs? Can they afford the political backlash from private homeowners if they feel “forced” to replace their gas boilers (something Rishi Sunak so recently tried to head off)?
But others might argue, given the improvements low carbon heating will make to the economy, and environment long-term, how can they afford not to?
It’s a threat that will send a shiver down the spine of Downing Street and shake the City of London to its core.
Even the notion that AstraZeneca (AZ) – the UK’s most valuable listed company – is thinking of upping sticks and switching its stock market listing to America is a frightening prospect on many levels.
After all, if your biggest firm departs for Wall Street, what message does it send to an already bruised London stock market that has struggled to find its way since the UK’s vote to leave the European Union?
The timing of the report in The Times that Pascal Soriot, the pharmaceutical company’s long-standing chief executive, is considering his own Brexit for the company, will not be lost on anyone.
The Treasury is under severe strain and the Starmer government, apparently focused on compromise given its welfare reform U-turns, bruised.
Ministers have been scrambling to get the support of business back, after a budget tax raid that has added to the cost of employing people in the UK, by launching a series of strategies to demonstrate a growth-led focus.
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Mr Soriot’s reported shift is the culmination of years of frustration over UK tax rates and support for business – though it could also remove a focus on his own remuneration as the highest-paid director of a UK-listed firm.
Image: Pascal Soriot has run AZ since 2012
AZ has its own gripes with Labour.
In January, the company cancelled a planned £450m investment in a vaccine factory on Merseyside, accusing the government of reneging on the previous Conservative administration’s offer of financial aid.
At the same time, it has been rebuilding its presence in the United States.
That speaks to not only a home market snub but also the election of a US president intent on protecting, as he sees it, America-based companies and jobs.
Donald Trump is threatening 25% tariffs on all pharma imports.
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How Trump’s tariffs are biting
AZ has already promised a $3.5bn (£2.6bn) investment in US manufacturing by the end of 2026.
It has also rejoined the leading US drug lobby group, bolstering its voice in Washington DC.
There are sound reasons for bolstering its US footprint; more than 40% of AZ’s revenues are made in the world’s largest economy. Greater US production would also shield it from any duties imposed by Mr Trump and any MAGA successor.
Since Brexit, complaints among UK stock market constituents have been of low valuations compared to peers (with a weak pound also leaving them vulnerable to takeovers), weaker access to capital and poor appetite for new listings.
Wise, the money transfer firm, became the latest UK name to say that it intends to move its primary listing to the US just last month.
Image: Shein had been exploring a London flotation until it was blocked. Pic: Europa Press via AP
If followed through, it would tread in the footsteps of Flutter Entertainment and the building equipment suppler CRH – just two big names to have already left.
London was snubbed for a listing by its former chip-designing resident ARM back in 2023.
An initial public offering by Shein, the controversial fast fashion firm, had offered the prospect of the biggest flotation for the UK in many years but that was blocked by the Chinese authorities.
Efforts to bolster the City’s appeal, such as through the Financial Conduct Authority’s overhaul of listing rules and the creation of pension megafunds to aid access to capital, have also been boosted in recent months by investors in US companies taking a second look at comparatively low valuations in Europe.
Market analysts have charted a cash spread away from the US as a hedge against an erratic White House.
The Times report suggested that Mr Soriot’s plans were likely to face some opposition from members of the board, in addition to the UK government.
Image: The City of London has faced a series of challenges since Brexit Pic: iStock
AstraZeneca has not commented on the story. Crucially, it did not deny it.
But a government spokesperson said: “Through our forthcoming Life Sciences Sector Plan, we are launching a 10-year mission to harness the life sciences sector to drive long-term economic growth and build a stronger, prevention-focused NHS.
“We have already started delivering on key actions, from investing up to £600m in the Health Data Research Service alongside Wellcome, through to committing over £650m in Genomics England and up to £354m in Our Future Health.
“This is clear evidence of our commitment and confidence in life sciences as a driver of both economic growth and better health outcomes.”
Governments don’t comment on stories such as these, but you can bet your bottom dollar that the departure of your biggest firm by market value is not the message a government laser-focused on growth can afford to allow.
A power outage that shut Heathrow Airport earlier this year, causing travel chaos for more than 270,000 passengers, was caused by a “catastrophic failure” of equipment in a nearby substation, according to a new report.
Experts say the fire at the North Hyde Substation, which supplies electricity to Heathrow, started following the failure of a high-voltage electrical insulator known as a bushing, before spreading.
The failure was “most likely” caused by moisture entering the equipment, according to the report.
Image: The fire at Hayes electrical substation, which led to Heathrow Airport shutting down in March. Pic: @JoselynEMuirhe1/PA
National Grid, which owns the substation, missed two opportunities to prevent the failure, experts found, the first in 2018 when a higher-than-expected level of moisture was found in oil samples.
Such a reading meant “an imminent fault and that the bushing should be replaced”, according to guidance by the National Grid Electricity Transmission.
However, the report by National Energy System Operator (NESO) said the appropriate responses to such a serious issue were “not actioned”, including in 2022 when basic maintenance was postponed.
“The issue therefore went unaddressed,” the report added.
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Moment Heathrow substation ignites
The design and configuration of the airport’s internal power network meant the loss of just one of its three supply points would “result in the loss of power to operationally critical systems, leading to a suspension of operations for a significant period”, the report added.
Heathrow – which is Europe’s biggest airport – closed for around 16 hours on 21 March following thefire, before reopening at about 6pm.
Image: The North Hyde electrical substation which caught fire. File pic: PA
Tens of millions of pounds were lost, thousands of passengers were stranded, and questions were raised about the resilience of the UK’s infrastructure.
More than 71,000 domestic and commercial customers lost power as a result of the fire and the resulting power outage, the report said.
NESO chief executive, Fintan Slye, said there “wasn’t the control within their [National Grid’s] asset management systems that identified that this [elevated moisture levels] got missed.
“They identified a fault, [but] for some reason the transformer didn’t immediately get pulled out of service and get repaired.
Image: Smoke rises following the fire
“There was no control within the system that looked back and said ‘oh, hang on a second, you forgot to do this thing over here’.”
Sky’s science and technology editor, Tom Clarke, pointed to the age of the substation’s equipment, saying “some of these things are getting really very old now, coming to the end of their natural lives, and this is an illustration of what can happen if they are not really well maintained”.
The report also highlights a lack of joined-up thinking, he said, as “grid operators don’t know who’s critical national infrastructure on the network, and they don’t have priority”.
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Heathrow bosses were ‘warned about substation’
Responding to the report’s findings, a Heathrow spokesperson said: “A combination of outdated regulation, inadequate safety mechanisms, and National Grid’s failure to maintain its infrastructure led to this catastrophic power outage.
“We expect National Grid to be carefully considering what steps they can take to ensure this isn’t repeated.
“Our own Review, led by former Cabinet Minister Ruth Kelly, identified key areas for improvement and work is already underway to implement all 28 recommendations.”
In May, Ms Kelly’s investigation revealed that the airport’s chief executive couldn’t be contacted as the crisis unfolded because his phone was on silent.
Image: Stranded passengers at Heathrow Terminal 5 following the fire
Pic: PA
Energy Secretary Ed Miliband, who commissioned the NESO report, called it “deeply concerning”, because “known risks were not addressed by the National Grid Electricity Transmission”.
Mr Miliband said energy regulator Ofgem, which opened an investigation on Wednesday after the report was published, is investigating “possible licence breaches relating to the development and maintenance of its electricity system at North Hyde.
“There are wider lessons to be learned from this incident. My department, working across government, will urgently consider the findings and recommendations set out by NESO and publish a response to the report in due course.”
National Grid said in a statement it has “a comprehensive asset inspection and maintenance programme in place” and said it has “taken further action since the fire”.
This includes “an end-to-end review” of its oil sampling process and results, further enhancement of fire risk assessments at all operational sites, and “re-testing the resilience of substations that serve strategic infrastructure”.
A spokesperson said: “We fully support the recommendations in the report and are committed to working with NESO and others to implement them. We will also cooperate closely with Ofgem’s investigation.
“There are important lessons to be learnt about cross sector resilience and the need for increased coordination, and we look forward to working with government, regulators and industry partners to take these recommendations forward.”
The UK’s YouTubers, TikTok creators and Instagram influencers have been surveyed on mass for the first time ever, and are demanding formal recognition from the government.
The creator economy in the UK is thought to employ around 45,000 people and contribute over £2bn to the country in one year alone, according to the new research by YouTube and Public First.
But, despite all that value, its workers say they feel underappreciated by the authorities.
Image: Max Klyemenko, famous for his Career Ladder videos, wants the government to take creators like himself more seriously. Pic: Youtube
“If you look at the viewership, our channel is not too different from a big media company,” said Max Klymenko, a content creator with more than 10 million subscribers and half a billion monthly views on average.
“If you look at the relevancy, especially among young audiences, I will say that we are more relevant. That said, we don’t really get the same treatment,” he told Sky News.
Fifty-six per cent of the more than 10,000 creators surveyed said they do not think UK creators have a “voice in shaping government policies” that affect them.
Only 7% think they get enough support to access finance, while just 17% think there is enough training and skills development here in the UK.
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Nearly half think their value is not recognised by the broader creative industry.
The creative industries minister, Sir Chris Bryant, said the government “firmly recognises the integral role that creators play” in the UK’s creative industries and the fact that they help “to drive billions into the economy” and support more than 45,000 jobs.
“We understand more can be done to help creators reach their full potential, which is why we are backing them through our new Creative Industries Sector Plan,” he said.
Image: Ben Woods said the government needs to “broaden its lens” to include creators
“The UK has got a fantastic history of supporting the creative industries,” said Ben Woods, a creator economy analyst, Midia Research who was not involved in the report.
“Whether you look at the film side, lots of blockbuster films are being shot here, or television, which is making waves on the global stage.
“But perhaps the government needs to broaden that lens a little bit to look at just what’s going on within the creator economy as well, because it is highly valuable, it’s where younger audiences are spending a lot of their time and [the UK is] really good at it.”
According to YouTube, formal recognition would mean creators are factored into official economic impact data reporting, are represented on government creative bodies, and receive creator-specific guidance from HMRC on taxes and finances.
For some, financial guidance and clarity would be invaluable; the ‘creator’ job title seems to cause problems when applying for mortgages or bank loans.
Image: Podcaster David Brown owns a recording studio for creators
“It’s really difficult as a freelancer to get things like mortgages and bank accounts and credit and those types of things,” said podcaster David Brown, who owns a recording studio for creators.
“A lot of people make very good money doing it,” he told Sky News.
“They’re very well supported. They have a lot of cash flow, and they are successful at doing that job. It’s just the way society and banking and everything is set up. It makes it really difficult.”
The creative industries minister said he is committed to appointing a creative freelance champion and increasing support from the British Business Bank in order to “help creators thrive and drive even more growth in the sector”.
The government has already pledged to boost the UK’s creative industries, launching a plan to make the UK the number one destination for creative investment and promising an extra £14bn to the sector by 2035.
These influencers want to make sure they are recognised as part of that.