Labour’s Sir Keir Starmer vows to kick off clean energy plans ‘within months’ if party wins general election

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7 months ago

May 31, 2024

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Labour leader Sir Keir Starmer will vow on Friday to “get working within months to build clean power across the United Kingdom” if his party wins the general election.

At an event in Scotland – and joined by Scottish Labour leader Anas Sarwar – the prime ministerial hopeful will reiterate his plans for Great British Energy, first announced at the party’s conference in 2022.

Headquartered north of the border, the new, publicly owned company will generate homegrown green energy up and down the country, with the party claiming it will help to “turn the page” on the cost of living crisis by driving down bills.

But the Conservatives claimed it was a “vanity project” of former Labour leader – and now shadow energy security and net zero secretary – Ed Miliband, that will “leave taxpayers picking up the bill”.

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Sir Keir will outline how initial investments will be made within weeks, including in wind and solar projects, and as the firm grows, it will look into floating offshore wind, hydrogen, and carbon capture and storage, in the hope of making Scotland “a world-leader in cutting edge technologies”.

The party said the pledge would be paid for through a windfall tax on oil and gas companies.

Sir Keir will say: “Family financial security depends on energy security. The pain and misery of the cost of living crisis was directly caused by the Tories’ failure to make Britain resilient, leaving us at the mercy of fossil fuel markets controlled by dictators like Putin.

“It doesn’t have to be this way. Our clean power mission with Great British Energy will take back control of our destiny and invest in cheap, clean homegrown energy that we control.

“We will turn the page on the cost of living crisis. The choice at this election is clear – higher bills and energy insecurity with the Conservatives, or lower bills and energy security with Labour.”

But Energy Security and Net Zero Secretary Claire Coutinho claimed the project was both unfunded and would “turn off the taps to North Sea oil and gas”, risking 2,000 jobs.

“By sticking to the Conservatives’ clear plan, energy bills are at the lowest point since 2022,” she added. “But we must go further.

“That’s why we are taking bold action to guarantee the future of the energy price cap, as we back new nuclear power and offshore wind, keeping bills low and ensuring families are not lumbered with the cost of reaching net zero.”

The SNP’s Westminster leader, Stephen Flynn, had an even bleaker assessment of the plan, claiming it was “threatening to destroy 100,000 Scottish jobs and deter billions of pounds of investment”.

He added: “The fact is Starmer’s plans would take Scotland’s energy wealth and spend it on nuclear projects in England.

“In contrast, the SNP wants every penny to be spent in Scotland – reducing household bills, creating Scottish jobs, and securing our green energy future.

“It’s no wonder the Labour Party has given up campaigning in the North East and huge swathes of Scotland – because Starmer knows how deeply unpopular his damaging policies are.”

Sir Patrick Vallance endorses GB Energy

However in a boost to Sir Keir, the plans were endorsed by Sir Patrick Vallance, the UK’s pandemic-era scientific adviser.

In a sensitive intervention for a former top civil servant, Sir Patrick wrote in The Times: “The prize is huge: lower energy bills, good jobs, more innovative businesses, energy security, and climate leadership.”

Great British Energy also got the backing of one campaign group, Britain Remade, who called it “hugely welcome”.

But its founder, Sam Richards, warned Labour “won’t be able to get spades in the ground as quickly as they need to – unlocking the benefits of cheap power and lower bills – unless they tackle head-on Britain’s outdated planning system”.

Environmental campaigners Friends of the Earth also called the plan “great news” but warned the Labour Party not to “rest on its laurels” when it came to reducing carbon pollution from transport and heating.

Elsewhere on the campaign trail on Friday, the Conservatives will be talking about tackling anti-social behaviour, unveiling plans to give fly-tippers points on their driving licenses, “kick out” anti-social tenants and roll out “hot spot” policing controls.

And the SNP will be making further demands on Labour, calling for them to hold an emergency budget straight after the election to “reverse Tory austerity cuts, boost NHS funding, and invest in economic growth”.

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UK long-term borrowing costs highest this century

Published

5 hours ago

January 7, 2025

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UK long-term borrowing costs highest this century

UK long-term borrowing costs have hit their highest level since 1998.

The unwanted milestone for the Treasury’s coffers was reached ahead of an auction of 30-year bonds, known as gilts, this morning.

The yield – the effective interest rate demanded by investors to hold UK public debt – peaked at 5.21%.

At that level, it is even above the yield seen in the wake of the mini-budget backlash of 2022 when financial markets baulked at the Truss government’s growth agenda which contained no independent scrutiny from the Office for Budget Responsibility.

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The premium is up, market analysts say, because of growing concerns the Bank of England will struggle to cut interest rates this year.

Just two cuts are currently priced in for 2025 as investors fear policymakers’ hands could be tied by a growing threat of stagflation.

The jargon essentially covers a scenario when an economy is flatlining at a time of rising unemployment and inflation.

Growth has ground to a halt, official data and private surveys have shown, since the second half of last year.

Critics of the government have accused Sir Keir Starmer and his chancellor, Rachel Reeves, of talking down the economy since taking office in July amid their claims of needing to fix a “£22bn black hole” in the public finances.

Both warned of a tough budget ahead. That first fiscal statement put businesses and the wealthy on the hook for £40bn of tax rises.

Corporate lobby groups have since warned of a hit to investment, pay growth and jobs to help offset the additional costs.

At the same time, consumer spending has remained constrained amid stubborn price growth elements in the economy.

Higher borrowing costs also reflect a rising risk premium globally linked to the looming return of Donald Trump as US president and his threats of universal trade tariffs.

The higher borrowing bill will pose a problem for Ms Reeves as she seeks to borrow more to finance higher public investment and spending.

Tuesday’s auction saw the Debt Management Office sell £2.25bn of 30-year gilts to investors at an average yield of 5.198%.

It was the highest yield for a 30-year gilt since its first auction in May 1998, Refinitiv data showed.

This extra borrowing could mean Ms Reeves is at risk of breaking the spending rules she created for herself, to bring down debt, and so she may have less money to spend, analysts at Capital Economics said.

“There is a significant chance that the Office for Budget Responsibility (OBR) will judge that the Chancellor Rachel Reeves is on course to miss her main fiscal rule when it revises its forecasts on 26 March. To maintain fiscal credibility, this may mean that Ms Reeves is forced to tighten fiscal policy further,” said Ruth Gregory, the deputy chief UK economist at Capital Economics.

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Growing threat to finances from rising bills

Published

11 hours ago

January 7, 2025

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There is mounting evidence that consumers are facing hikes to bills on many fronts after Next became the latest to warn of price rises ahead.

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Higher prices for 2025 as Christmas trading fails to meet expectations – BRC says

Published

17 hours ago

January 7, 2025

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Higher prices for 2025 as Christmas trading fails to meet expectations - BRC says

Shop prices will rise in 2025 as the key Christmas trading period failed to meet retailers’ expectations, according to industry data.

Shop sales grew just 0.4% in the so-called golden quarter, the critical three shopping months from October to December, according to the British Retail Consortium (BRC) and big four accounting company KPMG.

Many retailers rely on trade during this period to see them through tougher months such as January and February. Some make most of their yearly revenue over Christmas.

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The minimal growth came amid weak consumer confidence and difficult economic conditions, the lobby group said, and “reflected the ongoing careful management of many household budgets”, KPMG’s UK head of consumer, retail and leisure Linda Ellett said.

Non-food sales were the worst hit in the four weeks up to 28 December, figures from the BRC showed and were actually less than last year, contracting 1.5%.

What were people buying?

Food sales grew 3.3% across all of 2024, compared to 2023.

In the festive period beauty products, jewellery and electricals did well, the BRC’s chief executive Helen Dickinson said.

AI-enabled tech and beauty advent calendars boosted festive takings, Ms Ellett said.

What it means for next year

With employer costs due to rise in April as the minimum wage and employers’ national insurance contributions are upped, businesses will face higher wage bills.

The BRC estimates there is “little hope” of covering these costs through higher sales, so retailers will likely push up prices and cut investment in stores and jobs, “harming our high streets and the communities that rely on them”, Ms Dickinson said.

Separate figures from high street bank Barclays showed card spending remained flat since December 2023, while essential spending fell 3% partly as inflation concerns forced consumers to cut back but also through lower fuel costs.

The majority of those surveyed by the lender (86%) said they were concerned about rising food costs and 87% were concerned about household bills.

More info to come

Numerous UK retail giants will update shareholders on their Christmas performance this week including high street bellwether Next on Tuesday, Marks and Spencer and Tesco on Thursday and Sainsbury’s on Friday.