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In the narrow lanes around Aldham in Essex the countryside is close to the English ideal.

On an unseasonably warm mid-October day the fields recede to a low horizon, broken only by hedgerows and the spire of the parish church, the tallest landmark this side of Suffolk.

If National Grid has its way it won’t stay that way for long.

Aldham is on the route of a new pylon line that will run more than 110 miles, from Norwich to Tilbury on the Thames Estuary, carrying electricity generated on wind farms in the North Sea via high voltage cables suspended from 50-metre tall towers.

National Grid, the listed company that owns and runs the UK’s electricity network, says it’s crucial to a massive grid upgrade without which the transition from fossil fuels to low carbon power cannot happen.

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For locals and campaigners it’s an unnecessary intrusion that will bring steel giants marching through some of the most scenic countryside in the east of England.

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This is more than just a local planning dispute.

It’s a story about the most important national infrastructure project you have probably never heard of; about a glacial planning system that fails communities and builders; and the balance between local and national interests as the UK strives to hit its climate goals.

The great grid upgrade

On the road to net zero Britain is like a traveller who remembered their laptop and adapter but forgot to pack the plug cable.

For years we have been preparing for a low-carbon future by focusing on supply and demand, without thinking enough about the bit in between.

While supply has focused on phasing out fossil fuels, chiefly using offshore wind power, consumer and business demand has begun shifting to lower carbon options like electric vehicles and heat pumps.

This has transformed not just where we get our power, but how much we will need.

Demand for electricity will double in the coming decade as natural gas, petrol and diesel are phased out and a world reliant on digital data consumes vastly more power.

The expansion of offshore wind and, in time, nuclear, will meet demand, but those new power sources need to be connected to a grid originally built for the fossil fuel age.

The bones of the national grid were built in the 1960s and 70s, connecting power stations largely clustered around the coalfields of the north and midlands to cities and towns using ‘motorways’ of high-voltage pylons.

With most of our power coming from the coast in the future that has to change.

National Grid has identified 17 new or upgraded lines required, including undersea cables to link Scotland and the east of England and several onshore pylon routes, the largest of which is Norwich-Tilbury.

It will cost up to £19bn and most of it has to happen in seven years to meet the government’s target of decarbonising the grid by 2030.

Carl Trowell, President of strategic infrastructure at the National Grid
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Carl Trowell, President of strategic infrastructure at the National Grid

“There’s no energy transition without a massive upgrade to the transmission system. It’s an enabler for everything we want to do,” said the man in charge of delivering it, Carl Trowell, National Grid’s president of strategic infrastructure.

“Over the next seven to eight years we’ve got to build five times more infrastructure than has been built in the last 30, so it’s quite an upgrade.”

Fight the power

For Adam Scott, owner of Church House Farm in Aldham, the great grid upgrade means three 50-metre pylons planted on his land, and £6,000 each in compensation.

“You would happily pay £6,000 not to have them,” he said.

“There are many impacts. You’ve got to go round them with machines, you can’t irrigate land near them, if we want to grow trees to help climate change we wouldn’t be allowed to, so there’s a lot of separate impacts the pylons will have if they arrive in our village.”

Sky’s Business correspondent, Paul Kelso with farmer Adam Scott in East Anglia
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Sky’s Business correspondent, Paul Kelso with farmer Adam Scott in East Anglia

Mr Scott and residents along the entire route have been galvanised by perhaps the most effective local campaign group in the country, the Community Planning Alliance, founded and run by Rosie Pearson.

Dubbed the “Queen of the Nimbys”, a term she loathes, Ms Pearson has been hugely successful in helping community groups maximise their influence to oppose infrastructure projects, primarily housing.

She believes the pylons are unnecessary and should go under the sea, referring to rough drawings of an alternative offshore plan she says would be cheaper.

“We don’t see why the pylons should be built across East Anglia when the wind farms are offshore and the power is needed down south. It’s offshore, keep it offshore,” she said.

National Grid utterly rejects this, saying campaigners have misrepresented their figures and insisting an offshore route would cost £4bn as opposed to £1bn for the pylons, with consumers ultimately paying the difference.

“The first thing to say is that Norwich to Tilbury is part of a wider system, some of which is offshore and some onshore. Going offshore is four to five times more expensive, and it comes with its own environmental issues,” said Mr Trowell.

“And you can’t put all your infrastructure offshore. It takes hours to repair a pylon but it can take months to years to try and fix a problem or a fault offshore. Ultimately we have to strike a balance, and that’s what we’ve done.”

 Local campaign groups oppose National Grid’s Norwich to Tilbury proposals
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Local campaign groups oppose National Grid’s Norwich to Tilbury proposals

If the pylons are built, Ms Pearson says communities should be compensated for hosting in the same way as if Norwich to TIlbury was a train line.

Currently the grid, and the government’s electricity commissioner have said only that they should receive “benefits” from hosting infrastructure, such as cheaper bills.

“That’s patronising,” she said. “Full compensation needs to be paid to any farmer that’s having his business disrupted, any homeowner who can’t sell, any business that can’t run in the same way, not sweeteners.”

Planning problems

Where she and the grid agree is that the planning system is not working.

It can take a decade for major projects to pass through a system ill-designed to cope with the net zero infrastructure boom.

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De-carbonising Britain’s electricity grid

Rosie Pearson may have helped around 600 local groups challenge various building projects, but she rejects the accusation that they stand in the way of progress.

“I think people look at it the wrong way.

“The system creates the objector, the planning system even calls us ‘objectors’. If the system involved communities right from the beginning, presented them with options or alternatives, with facts and pros and cons, then you’d end up with decisions being made much faster.

“I can certainly say with this pylons campaign, if we’d all been consulted at the beginning we’d probably be working towards a better solution for everybody.”

For National Grid and other infrastructure developers the problem is a lack of clarity. Major planning decisions are guided by National Policy Statements, many of which are out of date and leave many decisions open to interpretation.

Sir John Armitt, chair of the National Infrastructure Committee and the government’s senior adviser, told Sky News they need urgent rewriting and regular updating.

“The process gets bogged down partly because there isn’t clarity of direction from the outset that enables an inspector to judge a project against the importance of the project to the nation, much more than to a locality,” he said.

“What we have to do over the next 20 years does require boldness, it requires clarity, it requires a sense of leadership and a sense that this is very important for our country in terms of the economy, our ability to grow jobs to spread that wealth around the country, our ability to compete.

“If we don’t make the changes to our infrastructure that’s necessary, we risk being left behind.”

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Chair candidates battle to check in at Premier Inn-owner Whitbread

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Chair candidates battle to check in at Premier Inn-owner Whitbread

Two chairs of FTSE-100 companies are vying to succeed Adam Crozier at the top of Whitbread, the London-listed group behind the Premier Inn hotel chain.

Sky News has learnt that Christine Hodgson, who chairs water company Severn Trent, and Andrew Martin, chair of the testing and inspection group Intertek, are the leading contenders for the Whitbread job.

Mr Crozier, who has chaired the leisure group since 2018, is expected to step down later this year.

The search, which has been taking place for several months, is expected to conclude in the coming weeks, according to one City source.

Ms Hodgson has some experience of the leisure industry, having served on the board of Ladbrokes Coral Group until 2017, while Mr Martin was a senior executive at the contract caterer Compass Group and finance chief at the travel agent First Choice Holidays.

Under Mr Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn.

The company has also seen off an activist campaign spearheaded by Elliott Advisers, while Mr Crozier orchestrated the appointment of Dominic Paul, its chief executive, following Alison Brittain’s retirement.

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It said last year that it sees potential to grow the network from 86,000 UK bedrooms to 125,000 over the next decade or so.

Mr Crozier is one of Britain’s most seasoned boardroom figures, and now chairs BT Group and Kantar, the market research and data business backed by Bain Capital and WPP Group.

He previously ran the Football Association, ITV and – in between – Royal Mail Group.

On Friday, shares in Whitbread closed at £25.41, giving the company a market capitalisation of about £4.5bn.

Whitbread declined to comment this weekend.

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

The bosses of four of Britain’s biggest banks are secretly urging the chancellor to ditch the most significant regulatory change imposed after the 2008 financial crisis, warning her its continued imposition is inhibiting UK economic growth.

Sky News has obtained an explosive letter sent this week by the chief executives of HSBC Holdings, Lloyds Banking Group, NatWest Group and Santander UK in which they argue that bank ring-fencing “is not only a drag on banks’ ability to support business and the economy, but is now redundant”.

The CEOs’ letter represents an unprecedented intervention by most of the UK’s major lenders to abolish a reform which cost them billions of pounds to implement and which was designed to make the banking system safer by separating groups’ high street retail operations from their riskier wholesale and investment banking activities.

Their request to Rachel Reeves, the chancellor, to abandon ring-fencing 15 years after it was conceived will be seen as a direct challenge to the government to take drastic action to support the economy during a period when it is forcing economic regulators to scrap red tape.

It will, however, ignite controversy among those who believe that ditching the UK’s most radical post-crisis reform risks exacerbating the consequences of any future banking industry meltdown.

In their letter to the chancellor, the quartet of bank chiefs told Ms Reeves that: “With global economic headwinds, it is crucial that, in support of its Industrial Strategy, the government’s Financial Services Growth and Competitiveness Strategy removes unnecessary constraints on the ability of UK banks to support businesses across the economy and sends the clearest possible signal to investors in the UK of your commitment to reform.

“While we welcomed the recent technical adjustments to the ring-fencing regime, we believe it is now imperative to go further.

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“Removing the ring-fencing regime is, we believe, among the most significant steps the government could take to ensure the prudential framework maximises the banking sector’s ability to support UK businesses and promote economic growth.”

Work on the letter is said to have been led by HSBC, whose new chief executive, Georges Elhedery, is among the signatories.

His counterparts at Lloyds, Charlie Nunn; NatWest’s Paul Thwaite; and Mike Regnier, who runs Santander UK, also signed it.

While Mr Thwaite in particular has been public in questioning the continued need for ring-fencing, the letter – sent on Tuesday – is the first time that such a collective argument has been put so forcefully.

The only notable absentee from the signatories is CS Venkatakrishnan, the Barclays chief executive, although he has publicly said in the past that ring-fencing is not a major financial headache for his bank.

Other industry executives have expressed scepticism about that stance given that ring-fencing’s origination was largely viewed as being an attempt to solve the conundrum posed by Barclays’ vast investment banking operations.

The introduction of ring-fencing forced UK-based lenders with a deposit base of at least £25bn to segregate their retail and investment banking arms, supposedly making them easier to manage in the event that one part of the business faced insolvency.

Banks spent billions of pounds designing and setting up their ring-fenced entities, with separate boards of directors appointed to each division.

More recently, the Treasury has moved to increase the deposit threshold from £25bn to £35bn, amid pressure from a number of faster-growing banks.

Sam Woods, the current chief executive of the main banking regulator, the Prudential Regulation Authority, was involved in formulating proposals published by the Sir John Vickers-led Independent Commission on Banking in 2011.

Legislation to establish ring-fencing was passed in the Financial Services Reform (Banking) Act 2013, and the regime came into effect in 2019.

In addition to ring-fencing, banks were forced to substantially increase the amount and quality of capital they held as a risk buffer, while they were also instructed to create so-called ‘living wills’ in the event that they ran into financial trouble.

The chancellor has repeatedly spoken of the need to regulate for growth rather than risk – a phrase the four banks hope will now persuade her to abandon ring-fencing.

Britain is the only major economy to have adopted such an approach to regulating its banking industry – a fact which the four bank chiefs say is now undermining UK competitiveness.

“Ring-fencing imposes significant and often overlooked costs on businesses, including SMEs, by exposing them to banking constraints not experienced by their international competitors, making it harder for them to scale and compete,” the letter said.

“Lending decisions and pricing are distorted as the considerable liquidity trapped inside the ring-fence can only be used for limited purposes.

“Corporate customers whose financial needs become more complex as they grow larger, more sophisticated, or engage in international trade, are adversely affected given the limits on services ring-fenced banks can provide.

“Removing ring-fencing would eliminate these cliff-edge effects and allow firms to obtain the full suite of products and services from a single bank, reducing administrative costs”.

In recent months, doubts have resurfaced about the commitment of Spanish banking giant Santander to its UK operations amid complaints about the costs of regulation and supervision.

The UK’s fifth-largest high street lender held tentative conversations about a sale to either Barclays or NatWest, although they did not progress to a formal stage.

HSBC, meanwhile, is particularly restless about the impact of ring-fencing on its business, given its sprawling international footprint.

“There has been a material decline in UK wholesale banking since ring-fencing was introduced, to the detriment of British businesses and the perception of the UK as an internationally orientated economy with a global financial centre,” the letter said.

“The regime causes capital inefficiencies and traps liquidity, preventing it from being deployed efficiently across Group entities.”

The four bosses called on Ms Reeves to use this summer’s Mansion House dinner – the City’s annual set-piece event – to deliver “a clear statement of intent…to abolish ring-fencing during this Parliament”.

Doing so, they argued, would “demonstrate the government’s determination to do what it takes to promote growth and send the strongest possible signal to investors of your commitment to the City and to strengthen the UK’s position as a leading international financial centre”.

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Post Office to unveil £1.75bn banking deal with big British lenders

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Post Office to unveil £1.75bn banking deal with big British lenders

The Post Office will next week unveil a £1.75bn deal with dozens of banks which will allow their customers to continue using Britain’s biggest retail network.

Sky News has learnt the next Post Office banking framework will be launched next Wednesday, with an agreement that will deliver an additional £500m to the government-owned company.

Banking industry sources said on Friday the deal would be worth roughly £350m annually to the Post Office – an uplift from the existing £250m-a-year deal, which expires at the end of the year.

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The sources added that in return for the additional payments, the Post Office would make a range of commitments to improving the service it provides to banks’ customers who use its branches.

Banks which participate in the arrangements include Barclays, HSBC, Lloyds Banking Group, NatWest Group and Santander UK.

Under the Banking Framework Agreement, the 30 banks and mutuals’ customers can access the Post Office’s 11,500 branches for a range of services, including depositing and withdrawing cash.

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The service is particularly valuable to those who still rely on physical cash after a decade in which well over 6,000 bank branches have been closed across Britain.

In 2023, more than £10bn worth of cash was withdrawn over the counter and £29bn in cash was deposited over the counter, the Post Office said last year.

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A new, longer-term deal with the banks comes at a critical time for the Post Office, which is trying to secure government funding to bolster the pay of thousands of sub-postmasters.

Reliant on an annual government subsidy, the reputation of the network’s previous management team was left in tatters by the Horizon IT scandal and the wrongful conviction of hundreds of sub-postmasters.

A Post Office spokesperson declined to comment ahead of next week’s announcement.

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