Unite leader Sharon Graham suggests that a ban on oil and gas licences is the main threat to North Sea jobs. That is not true.
It usually takes more than ten years from licence issue for a field to start production, so there is only a very indirect connection. In recent years oil corporations’ decisions to slim down their North Sea operations has posed a far more immediate threat.
If Labour reverses its ban on new licences, the only beneficiaries will be those corporations – while the planetary disaster threatened by climate change would come one step closer, as the heads of the UN and International Energy Agency have pointed out. Indeed there is a powerful case for scrapping the already-granted licence for the giant Rosebank field.
Unite says it wants to “see the money and the plan” for the transition away from oil and gas. But as its leaders well know, plans already exist.
The Sea Change report, published five years ago, showed how the North Sea workforce could expand, with investment in wind power and other renewables. The oil companies and Tory government have other ideas, set out in the North Sea Transition Deal – which proposes spending £15 billion on their pet technofixes, carbon capture and hydrogen.
Unite, along with other unions, accepts these false solutions, and calls for investment in hydrogen and carbon capture, as well as wind power.
At a recent gathering of trade unionists concerned with climate policy, Pete Cannell of the campaign group Scot E3 argued that, given the dominance of this technofix narrative, “it’s legitimate to ask whether ‘just transition’ is any longer the right framing”.
Perhaps we should be talking about “rupture, rather than transition”, he said, to make gains for social justice and tackling climate change. This starts with uniting oil workers and Scottish working-class communities more broadly. This is the conversation we urgently need.
Public ownership
Labour will set up a “publicly-owned clean power company”, GB Energy, paid for by a windfall tax on oil and gas producers. But GB Energy will own few, if any, electricity generation assets and will focus on partnerships with private capital.
Labour also plans to leave the electricity transmission and distribution grids in private hands, and to leave largely unchanged the neoliberal electricity market rules that allowed corporations to reap billions by impoverishing households in the 2022 “energy crisis”.
Labour intends to capitalise GB Energy with £8.3 billion over the next five years: £3.3 billion for a potentially useful Local Power Plan (see part 3 below), and £5 billion to “co-invest in new technologies” including floating offshore wind and hydrogen, and “scale and accelerate mature technologies” including wind, solar and nuclear.
Labour’s loud claim that GB Energy will “lower [electricity] bills because renewables are cheaper than gas” is not credible. This would require, at least, an investment far greater than £5 billion, allied to a root-and-branch overhaul of electricity markets.
More likely, GB Energy will, at best, fund new technologies that financial markets prefer not to risk their own money on – or even follow in the footsteps of Tony Blair’s disastrous Private Finance Initiative, with which corporations milked billions from the NHS.
The Guardian, apparently briefed by Keir Starmer’s team, reported that GB Energy will probably start with “investments alongside established private sector companies”, including the chronically over-budget Hinkley Point, Sizewell C and Wylfa nuclear projects.
The Greens and others slammed Starmer, when he finally clarified on 31 May that GB Energy will essentially be an investment vehicle.
But a trenchant critique had already been published last year: Unite’s Unplugging Energy Profiteers report, which warned that “unless combined with a public purchasing monopoly, or significant market reform intervention, [GB Energy] will have no impact on distorted pricing in the wholesale market”, and “by concentrating very limited resources on de-risking experimental forms of generation, GB Energy will use public resources to underwrite and further increase future potential profits for the private sector”.
Unite, and the Trades Union Congress, call for public ownership to be extended not only in electricity generation, but also in the supply business and in transmission and distribution networks. Labour made similar calls in 2019, but has now ditched them.
Underinvestment in these networks is a scandal as damaging as the water companies’ rip-off: tens of billions of pounds’ worth of network upgrades are needed to facilitate renewable generation and close the gap on missed climate targets.
Already, there are 10+year queues for renewables to be connected to the grid; house-builders are fitting climate-trashing gas boilers because they cannot access electricity for heat pumps; battery storage lies unused because companies’ computer systems are out of date … all while distribution networks paid out £3.6 billion in dividends to shareholders in 2017-21.
The system is in such a state that even Rishi Sunak’s dysfunctional government took regulatory powers away from National Grid and put them in the Future System Operator.
Nick Winser, the electricity network commissioner, warned the government that unchanged, the system would leave “clean, cheap domestic energy generation standing idle, potentially for years”. “Very few new transmission circuits have been built in the last 30 years”, he said: unless jolted, companies could take up to 14 years to build them.
To make the electricity network fit for the transition away from fossil fuels, wider public ownership is crucial. Our movement needs to work out how to coordinate the fight for it.
Community energy
Labour promises to spend £3.3 billion on a Local Power Plan, under which GB Energy will “partner with energy companies, local authorities and cooperatives to develop up to 8GW of cheaper, cleaner power by 2030”. Up to 20,000 renewable projects will return “a proportion” of their profits back to communities. But “the detail on these plans is sparse”, the New Statesman reported – and so it is surely up to community organisations and the labour movement to discuss effective ways this money could be spent.
Until now, central government has been a wrecking ball for community energy. In 2015, it changed planning rules, effectively blocking onshore wind projects. In 2019, it scrapped the feed-in tariff paid for electricity supplied to the grid from small-scale renewables. And for years – as decentralised renewables technology leaped forward internationally – it ignored calls to overhaul market rules. Small renewables projects were locked out of the grid by the need for a £1 million+ licence, and other obstructions.
The Green New Deal all-party parliamentary group last year called for the regulatory system to be turned upside down, to end its bias in favour of the “big five” generators. It proposed a “European style ‘right of local supply’”; changes to rules on planning and public procurement; mandatory transparency of grid data; and other measures.
Such changes would make it possible to replicate the success of Energy Local in Bethesda, north Wales, which supplies locally-produced hydro power to households at below-grid prices. In April, the Common Wealth think tank proposed a “public-commons partnership” as the institutional form under which local authorities could develop such projects.
All this will take a fight, though. Otherwise, electricity corporates will spread their tentacles into decentralised renewables, as they are doing in the US and Australia.
Furthermore, we need to overcome the official labour movement’s residual reluctance to support community energy projects. The TUC’s recent renewables policy paper, which lists offshore wind, wave, nuclear and “zero carbon hydrogen” as energy technologies – but not decentralised wind and solar – is, unfortunately, indicative.
Decentralised renewables, developed with cooperative, community and local authority forms of ownership and governance, can help to break corporate control of electricity provision, and open the way to democratise and decommodify it.
False solutions
False technofixes, including hydrogen and carbon capture, use and storage (CCUS) feature prominently in Labour’s election manifesto – the outcome of lobbying by the oil industry, for which they comprise a survival strategy.
Nuclear power – expensive, dangerous, and beloved of the military – is there too, grabbing funds from proven, socially useful technologies such as home insulation, public transport and decentralised renewable power.
While the case against nuclear has been made, and the false logic of CCUS exposed, over decades, the drive for hydrogen is more recent: it is the oil companies’ alternative to electricity-centred decarbonisation.
Energy systems researchers argue that, while hydrogen may be needed in future for example, for steelmaking or energy storage, it will never be suitable for home heating, and hardly ever for transport.
The Tory government has invested heavily in hydrogen, and the 2023 Energy Act provided a framework for its commercial development. But attempts to bribe communities into testing it out for home heating have hit setbacks.
A planned test at Whitby, Merseyside, was cancelled last year after vigorous opposition by local residents and the HyNot campaign group. This year a second planned test at Redcar, Yorkshire, and a third one in Fife, Scotland, were both postponed.
Catherine Green Watson of HyNot said: “These postponements are great progress for our campaign. But on Merseyside we still have strong local political support for hydrogen in industry, which should not be the priority. Instead, we need to concentrate on upgrading the electricity grid.”
We need a discussion in the labour movement and social movements about the social role of these technologies. We could work towards unity around the principle that they should not receive state funding that could go to quicker, more effective decarbonisation paths.
Homes and transport
Labour has scaled back its promises to invest in its Warm Homes Plan that will fund grants and low-interest loans for insulating homes and replacing gas boilers with heat pumps. Shadow energy secretary Ed Miliband last year talked about “up to £6 billion a year”; by the time Labour’s manifesto was published last week, this had shrunk to “an additional £6.6 billion over the course of the next parliament”, in other words, spread over five years). Talk of upgrading 19 million homes had stopped; now it’s five million.
Labour has stuck with commitments to take railways back into public ownership, and to support municipal ownership and franchising of bus services. But it is also promising to “forge ahead with new roads”, and keep the transport system centred on private cars, at a time when researchers argue that this cuts dangerously across tackling climate change.
If Labour sticks to this course, determined by its neoliberal fiscal rules and by corporate lobbying, then key opportunities to cut UK carbon emissions, while improving people’s lives, will be missed.
Researchers have been screaming for years that insulation and heat pumps, and superceding the car-centred transport system with better, cheaper public transport, are desperately needed to decarbonise homes and transport, the two largest sources of greenhouse gas emissions.
Battles on effective energy conservation in homes, transport and throughout the economy are part of the war to limit climate change.
Labour’s commitments are too timid to reverse the disasters caused by Tory policies. In the decade from 2012, annual completions of home insulation upgrades fell by nine tenths.
The measures announced by government last year would take 190 years to improve the energy efficiency of the UK housing stock and 300 years to hit the government’s own targets for reducing fuel poverty, National Energy Action stated.
As for roads, the government could cancel the £10 billion Lower Thames Crossing scheme, final approval of which has been delayed until October, and apply to all future projects the principle adopted by the Welsh government – that they can only go ahead if compatible with climate policy.
Labour may not only fail to deal with these gigantic sources of carbon emissions, but actually open up new ones. A grim example is Labour’s threat to overrule communities who question tech corporations who want to build fuel-guzzling data centres – which will help trash climate targets, to the benefit of those corporations alone.
Holistic solutions
The stakes are high. Every new assessment by climate scientists underlines the conclusion reached by leading British researchers four years ago: that the UK’s decarbonisation targets are half as stringent as they need to be, to make a fair contribution to tackling global heating.
The government’s own climate change committee says non-power sectors of the economy need to decarbonise four times faster than they are doing.
Tackling climate change, while reversing the effects of 14 years of neoliberal austerity policies, will not be easy. Indeed, Labour does not intend to: both decarbonisation and social policy will be subordinated to their fiscal rules.
The labour movement and social movements need to challenge and push back Labour’s pro-fossil-fuel, pro-austerity approach.
We need to unite our forces and find the pressure points – be it saying “no”, to the Lower Thames Crossing project and similar, or finding openings for collective action, such as in the Local Power and Warm Homes plans.
To act effectively on climate, we need to keep in mind the necessity of holistic solutions, and reject illusory technofixes and greenwash narratives that claim to reduce emissions with one hand, and pour them into the atmosphere with the other.
This author
Simon Pirani is honorary professor at the University of Durham, and blogs at peoplenature.org