Peter Franklin: Unreal thinking will kill the Conservative Party

15 Aug

Peter Franklin is an Associate Editor of UnHerd.

What is political correctness? The most obvious answer is that it is a particular set of political ideas — typically those of the post-modern, progressive left. But there’s another, broader, definition — one that has more to do with epistemology than ideology.

How does one judge whether something is true or false? One could try do it objectively — assessing whether a claim has a basis in reality. Alternatively, one could start with an overarching political narrative — and then accept the things that fit with the story, while rejecting those that don’t. Thus instead of factual correctness, the criterion is political correctness.

On this definition, PC is not just a left-wing affair, but can be found across the political spectrum. In America, right-wing political correctness can be seen in the influence of conspiracy theories on the Republican Party. However, we shouldn’t assume that Tory common sense protects British conservatism. The fact is that rightwing PC — though in a different form to the US version — is making in-roads in this country too.

Consider the issue of the day: the cost of living crisis. As we sweat through another heat wave, it’s difficult to focus on the approaching winter — but nevertheless it is coming, along with an unprecedented surge in the price of gas and electricity.

The energy price cap for domestic users is going to shoot up in October and again in January. We don’t yet know the exact figures, but barring a miracle it won’t be hundreds of pounds added to household bills, but thousands. And this in a country where one in five adults have savings of less than £100.

Why is this happening? Is it because we’ve relied for far too long on the insecurity of non-renewable, imported energy sources? Or shall we claim it’s the fault of climate change policy?

No prizes for guessing which explanation the anti-greens prefer. For instance, here’s Lord Frost in the Telegraph. He starts off by correctly predicting that “a national emergency is coming.” However, he pins the blame on “net zero proponents” who chose to “rely on renewables and interconnectors, and to run down storage.”

Let’s deal with these items in turn. Firstly, renewables reduce aggregate demand for imported gas — and are thus saving us a lot of money. “Interconnectors” are links between different countries’ gas and power grids; as such they facilitate free trade (which I thought that Frost was in favour of). As for “storage”, I’m assuming that he means the stockpiling of natural gas — where the UK has indeed run down its capacity. However, this has nothing to do with net zero.

The key development was the closure of the Rough storage facility — a depleted gas field in the North Sea. It was the wrong decision, but one made on economic grounds alone. With several LNG import terminals up-and-running it was thought that we could rely on the tanker trade instead. It was yet another victory for the just-in-time ethos of the globalised economy. Therefore to blame environmentalism, which seeks to balance short-term efficiencies against long-term sustainability, is perverse.

David Frost isn’t the only Tory peer out to finger the greens. Daniel Hannan does the same (also in the Telegraph). His claim is that our leaders don’t want us to have cheap energy. It’s a provocative idea — but what are these abundant domestic resources of which we’ve been so cruelly denied? As far as I can tell, Hannan has three examples in mind: nuclear, shale gas and and “300 years’ supply of coal”. Oh dear.

I’ve busted the nuclear and shale myths before. The truth is that the Government has promoted both of these industries, but they haven’t delivered. After successive construction delays, we’re still waiting for the first of the new nuclear plants to be finished. Meanwhile, the supposed “ban” on shale gas is actually a moratorium that followed earthquakes at the UK’s sole commercial fracking site.

As for that cornucopia of coal, I’m sure that Arthur Scargill would have agreed. Yet it wasn’t environmentalism that shut-down Britain’s pits, but market forces. In fact, Hannan says so himself in the same article: “the transition from relatively dirty coal to relatively clean gas required very little state involvement…the Thatcher government simply withdrew subsidies and allowed the market to do its work.” In fact, this is the trump card in Hannan’s argument, which is that government should just get out of the way — and let price signals dictate the energy mix.

But what does he think would have happened if that had been the case? For most of the last thirty years, gas was the cheapest source of energy. Thus in Hannan-world we’d have built nothing but gas-fired power stations since the 1980s. As a result, our exposure to the current crisis would have been total.

I’m grateful that Hannan believes that “decarbonisation will happen eventually, as alternative sources become cheaper than fossil fuels.” However, he hasn’t noticed that this happy day has arrived. Even before the gas price surge, renewables were becoming cost competitive — and now they’re several times cheaper. Thank goodness we had the foresight to support them in their infancy.

When you believe an opponent to be fundamentally wrong about something, it’s tempting to see them as either ignorant or dishonest. But I don’t think that of the Noble Lords Hannan and Frost. They just need to escape the right-wing political correctness in which markets are always effective and environmentalism always suspect.

Furthermore, it’s not just the hard-liners who need to free their minds. The mainstream of the party is also trapped within a false narrative — as made painfully clear by the current leadership contest.

Here, the delusion is arguably more disturbing. Instead of falsely blaming net zero for the cost-of-living crisis, there’s been failure to face-up to the true extent of the emergency itself. Indeed, we’ve spent the last six weeks stuck in a make-believe world of fantasy tax cuts. For all the references to Margaret Thatcher, there’s been no acknowledgement that the benign conditions that enabled the fiscal policies of the 1980s no longer apply.

Liz Truss insists that this country’s best years lie ahead of us. But it isn’t true — or at least it won’t be for a long time. What does lie ahead is a troubled post-Covid future in which recession looms, war rages in Ukraine and broken supply chains disrupt the global economy. Beyond that, we can also look forward to a possible invasion of Taiwan, the next Eurozone crisis, an American meltdown and a second degree centigrade of global warming.

So forget those sunlit uplands, we need a Prime Minster capable of leading us through the fire. I’m not sure that’s Rishi Sunak, but I’m certain it’s not Liz Truss. Anyone capable of dismissing emergency aid to freezing households as “handouts” is obviously lost to the reality of our situation. Nor does she seem to understand that the households who would most benefit from her tax cuts are not those most exposed to rocketing fuel bills.

Perhaps she’s got a cunning plan for funding her tax policies and getting the country through the coming winter. But I don’t see how. Upon becoming Prime Minister, reality will shatter the narrative. Truss will either have to break the promises that got her elected or condemn millions to hypothermic bankruptcy. Either option will be politically cataclysmic.

But then that’s the problem with political correctness — it does a lot more harm to the right than it does to the left. While socialism and liberalism are about telling people what they want to hear, conservatism is about telling them what they need to hear.

Failing to do that is the ultimate betrayal of our values.

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Neil O’Brien: Challenges for the new Prime Minister 1) Energy. The Treasury will advise limited nuclear and carbon capture. It should be ignored.

1 Aug

Neil O’Brien was until recently a Miister at the Department of Levelling up. He is MP for Harborough.

Ah, the 1970s. The nostalgia industry has given the decade a familiar iconography.

Flared jeans and Milton Keynes… Mullahs in Iran….The Magic RoundaboutMy Sweet Lord and Concorde… decimalisation, stagflation and women’s’ liberation… Star Wars, Jaws, The Doors… Vietnam, Spam and Glam…. roller skates and economic policy mistakes.

Some of the most enduring images of the 1970s are the multiple energy crises. Office workers typing by candlelight during the miners’ strike. Cars queuing for petrol after the oil shock.

Among the most urgent questions facing our new Prime Minister is: are we heading back to the 70s this winter?

Gas prices in Europe went up a third last week after Russia said it will limit the flow to Germany. Goldman Sachs says recession in Europe is more likely than not. The US is already in recession. Last week saw predictions that household energy bills here could hit £4,000 a year.

Britain has decent gas supply: just under half our gas comes from our own continental shelf, a third via pipeline (almost all from Norway) and a quarter from LNG imports.

But the UK is unusually gas dependent: 40 per cent of our energy is from gas, compared to 25 per cent in the EU. Both UK and EU are in a traded market, with prices many times higher than the longer run average.

The UK also starts from really high industrial electricity prices, so increases are even tougher on industry.

A really high price becomes pretty similar in practice to a physical shutoff. Energy feeds into the price of everything else: McDonalds just raised the price of a cheeseburger for the first time in 14 years.

Countries around us are preparing for the worst. Germany is both ramping coal power and reducing demand, creating a market to reward companies that reduce gas consumption. EU members just reached an agreement to reduce gas consumption 15 per cent over the winter.

Short term

Over recent decades, policy focussed on optimisation not resilience: making things leaner, not tougher.

Now, in a more volatile world, that looks like a mistake. We stopped requiring a copper wire alongside new fibre phonelines, meaning a powercut now means phones cut too. We shuttered gas storage, sold gold, outsourced the production of vital medical kit to a dictatorship that hates us…

It’s the same story in energy, so our short-term options are limited. We can try increase our tiny gas storage. In February, the UK had just 8.5 terawatt-hours of stored gas, versus 36 in France, 79 in Germany and 84 in Italy – ten times more than us.

The Business Department just gave Centrica permission to try reopen the Rough storage facility, closed in 2017. But there are big engineering challenges. And while storage can help smooth spikes in prices, it doesn’t stop long term increases. Nor is there an option to stop exports: we export gas in summer but import in the winter. We’ll be extremely dependent on continental partners sticking to their side of the bargain.

National Grid have persuaded four out of five remaining coal power stations to delay closure which will help.

We could build a contractual market for demand reductions from businesses, as countries others are. National Grid imply they’re trying to do this, but their winter outlook is a bit opaque, perhaps to avoid people freaking out. An orderly market is better than industrial firms being forced out of business by price spikes. Public sector buildings could be the first participants.

Government could promote domestic savings too – it’s amazing that turning down the thermostat one degree can save large amounts.

Long term

In the longer term we’ve more options. What we do about nuclear is the biggest choice. Reducing reliance on gas would spike Vladimir Putin’s energy weapon.

At present, just 15 per cent of our electricity is nuclear, but only one station is being built, and all existing stations will be closed within a decade – Hinkley Point B shuts this week. The Energy Security Strategy included an aspiration to increase nuclear to 25 per cent of electricity by 2050, and said we’d take one new project to final investment decision this Parliament.

Yet the decision on nuclear is far from made.

In the new Prime Minuster’s early meetings, Treasury officials will sketch out an attractive-looking scenario with more limited nuclear, in which unproven technologies like carbon capture take the strain.

They’ll probably skim over the fact that this scenario involves us installing solar panels covering an area nearly the size of Greater Manchester.

They will argue that Great British Nuclear should be a “small, nimble organisation” and that we should “leave it to the market” to develop.

This would mean we build absolutely no new nuclear power, and the new Prime Minister should ignore them:

  • Even if prices fall, Russia has shown it will use energy as a weapon, and that won’t change.
  • Gas prices already soared in 2021, pre-invasion – as Dieter Helm points out, uncertainty is high and we can’t assume a future of low, stable prices.
  • With the global population exploding and relative power of the west declining, we should reduce our dependence on the kindness of strangers.
  • Demand for electricity is soaring: the Review of Electricity Market Arrangements last month suggested we need to triple capacity by 2035.
  • Renewables are intermittent, and can’t always supply at the key moment. National Grid calculates “Equivalent Firm Capacity”: how much reliable capacity a resource can displace without increasing the risk of blackouts. A combined cycle gas turbine is rated at 90 per cent, coal and nuclear at 80 per cent, but offshore wind at just 8.5 per cent, onshore wind at 6.3 per cent, and solar at 3.3 per cent, because it’s not sunny during the UK’s winter use peak. We need firm power.
  • The volume of onshore renewables we are already planning is likely to lead to extensive industrialisation of the countryside.
  • By a happy coincidence, the potential sites for new nuclear tend to be in coastal locations needing levelling up – the coasts of Cumbria and Lancashire, Anglesey, Hartlepool and so on.

Two things drive the cost of nuclear. The first is the cost of capital. The recent decision to move to a system where it is funded on balance sheet largely solves that.

The second is commissioning at scale. The countries that built nuclear cheaply benefitted from learning-by-doing – having the same teams building the same thing again and again. That’s what the French did in the 1970s and 1980s (in red below) and the South Koreans more recently (in pink).

The new Prime Minister should gear up Great British Nuclear to commission a substantial pipeline of plants. It should get control over the nuclear sites and drive the use of as much British content as possible.

There are choices about which technology to use. Newly nationalised EDF are unlikely to want to do more. We could partner with the Koreans, arguably the world leaders. We could buy back technology from Westinghouse, or buy equity in it. (Gordon Brown sold it to Toshiba in 2006, it’s now owned by a Canadian fund).

Or we could order a substantial number of small/medium sized, factory-built reactors from Rolls Royce, which might also open the way to exports in coming decades. That might also give some more flexibility we would be buying in smaller “lumps”.

Either way, the key is to make a clear decision and stick with it, and not do what the UK keeps doing, and building expensive one-off reactors.

Churchill said you should “never let a good crisis go to waste”. The new Prime Minister should seize this grim moment to end our energy dependence on hostile powers.

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Help hard-working people and go for more growth. The economic policy and message that Johnson needs.

23 May

Sue Gray is set to present her report this week.  Boris Johnson’s fate may hang on it.  But whether he stays or goes, the cost of living crisis will remain.  Britain faces the biggest drop in living standards since the 1950s.  And the Government seems to have no agreed plan for what it wants to do or who it wants to help.

Some MPs want benefit rises.  Others want tax cuts.  For some, axeing green levies is the priority.  For others, reductions in VAT. For others still, transferable allowances for families.  Cabinet Ministers are freelancing over a windfall tax.  This is nature abhorring a vaccum with a vengeance.

Essentially, there are two schools of thought.  To the first, the main enemy is rising prices.  Those who believe this tend to want tight monetary and fiscal policy.  To the second, it is low growth.  Those who hold it look favourably on looser monetary and looser fiscal policy, though not necessarily at the same time.

Enter a variant of the second school, as expounded by our columnist, John Redwood.  Essentially, he makes the agonising choice between more borrowing, and the higher interest rates that could come with it, and less spending or more taxes vanish – “just like that”.

This is because Treasury forecasts are consistently wrong, and the deficit came in “at £90 billion below the Office for Budget Responsibility and Treasury forecast”. It follows that Rishi Sunak could use some of that £90 billion before the autumn to help people meet the cost of living.  Which is indeed what most Conservative MPs want him to do.

If this sounds a bit too good to be true, that’s because it is – in a certain sense. Any windfall spent now is one that can’t be spent later (assuming it’s still there).  So the Chancellor would be splashing the cash this year, with the last feasible election date some eighteen months off.

And, of course, money spent now can’t be used to pay off debt. Furthermore, if Sunak goes on a spree, voters won’t be grateful: they never are.  That, after all, is a lesson of Coronavirus.  In any event, the Treasury disputes rosy inflation and interest rate forecasts – arguing that at four per cent of GDP the deficit is stubbornly high.

Nonetheless, voter need requires Sunak to present a package, whatever the party politics. With poverty for working families hitting a record high, and almost a fifth of adults having less than £100 in savings, and one in five families facing fuel poverty, the Chancellor will act before the energy price cap rises again in the autumn.

Having cleared the first hurdle (in other words, decided to present another mini-budget), Johnson, Sunak and company will face the second – namely, determining who it will most aim to help.  Here, the answer is straightforward and uncompromising: those in most need of it.

That means voters who have less room, if any, to cut back their household commitments. They would be helped by a further Council Tax cut for lower bands, extending the warm homes discount, shifting green levies from household bills, and uprating Universal Credit: remember, some 40 per cent of those who receive it are in work.

Raise moral hazard or work disincentives all you like: special help in hard times will always start from the poorest up.  Though it won’t stop there: many of those on Universal Credit, for example, are Nick Timothy’s “just about managing”.  This is a programme for Erdington as well as Easterhouse.

If that sounds discouraging for Conservative voters in Blue Fade seats, or for those clamouring for a cut in the standard rate of income tax now, I have if not exactly good news now then at least the prospect of some later – if they’re interested in the higher growth that helps to fund spending increases and tax increases in the first place.

The first bit is that boosting growth has at least as much to do with supply as demand.  That means Jacob Rees-Mogg, who has made a start in efficiencies with his plan cut civil service numbers, streamling regulation. He has an entire report by Iain Duncan Smith, Theresa Villiers and his colleague George Freeman to draw on.

Its menu covers everything from risk margins in Solvency II through deploying low-carbon technologies on to the National Grid and repealing the EU Clinical Trials Directive to scrapping the Port Services Regulation 2019 to remove
unnecessary, EU-derived regulatory burdens on UK ports.

The biggest supply-side issue of all is housing – the shortage of which harms family life, slows labour mobility and lowers wages.  Michael Gove is tasked with squaring the circle of winning local consent, raising home ownership – and building more houses.  Then there are Sunak’s own productivity-boosting plans.

The second slice of better news is that the Chancellor may be able to persuade the markets that more borrowing and tax cuts should bear no interest rate penalty (whatever is done with a Windfall Tax).  The condition is that these are clearly focused on boosting growth rather than consumption.

On spending, that would imply more for infrastructure, especially in provincial England, for science and technology, and for skills – for example, the rebalancing between academic and vocational courses that the Government wants to see.  On tax, that would suggest cuts for business and workers.

Some of those cuts, if there is enough of that £90 billion left to draw on, could simply be cancelling increases – including the Health and Social Care Levy and, if Sunak can find no convincing replacement for the “super-deduction”, scrapping the Corporation Tax rise.

Rob Colvile wrote yesterday about the negative signal that the rise sends to business and, as so often, the message is almost as important as the detail (such as the rate at which the tax will take the most revenue).  This takes us to the Prime Minister and the Chancellor.

Sunak is able to detail a mass of spending to which he is already committed.  What he and Johnson have not yet done is roll these up into a package and a message.  Remember George Osborne “not balancing the budget on the backs of the poor”?  His “long-term economic plan”?  “We’re all in this together”?

Johnson and Sunak need a message.  Voters will roll up their sleeves and stick it out if they think the Government has a plan for the country, as they did after 1979 and 2010. My starting bid is: “we are helping hard-working people and going for bigger growth”.

I appreciate that many voters don’t know what growth is, and that my draft needs rather a lot of work.  But at least it’s a start.  What alternative is there?  Ministers could sit on their hands and do nothing this year.  Or seek to please the right-wing entertainment industry with performative tax cuts.

Sunak tried a bit of that in his Spring Statement – and look where it got him.  Mention of Sunak leaves me with a riddle.  The non-dom row has sapped his authority.  A Government needs its Chancellor to command fear.  Sunak may do so once again one day, and revive his status as a potential Conservative leader, but at present he doesn’t.

The puzzle is that, on the one hand, Johnson wants a big animal at the Treasury, to deliver for the Government. And that, on the other, he doesn’t, since such a creature would be a threat to him.  I leave this conundrum for our readers to solve.

Gerard Lyons: Sunak’s task tomorrow. The best way of reducing the deficit is to go for growth.

22 Mar

Dr Gerard Lyons is a senior fellow at Policy Exchange. He was Chief Economic Adviser to Boris Johnson during his second term as Mayor of London.

Rishi Sunak needs to provide context, actions and vision when he delivers his Spring Statement to the House of Commons this week.

Context, so that people can understand the present difficult economic environment and what lies ahead. Actions will be needed to cushion the imminent cost-of-living crisis. And the Chancellor needs to outline a vision, both from a domestic political perspective and to reassure financial markets and investors about the outlook for the economy.

The current context is a difficult one. The war in Ukraine and the associated high level of oil and commodity prices has added to uncertainty, both here in the UK and globally. This will be reflected in the economic forecasts from the Office for Budget Responsibility (OBR) that will accompany Sunak’s statement.

At the time of their previous forecast, last October, the OBR was forecasting growth of six per cent and inflation of four per cent this year. Now, depending upon their assumptions, the OBR’s growth forecast could be half and their inflation forecast almost twice as high as then. Hence the increased fear of stagflation – where inflation is higher, and growth lower.

For next year, the OBR will be expecting growth to slow further and inflation to ease. It is their cautious future growth outlook that limits the Chancellor’s room for fiscal manoeuvre. Sunak will also stress that higher inflation and interest rates increases the amount spent on servicing the national debt.

Despite this, the Chancellor should not feel constrained by the OBR’s forecasts into limiting the actions he can take. The margin of error for the budget deficit forecasts has been high in recent years – for obvious reasons, perhaps.

Importantly, the fiscal numbers, while poor, are clearly on an improving trend. During the first ten months of this fiscal year, public sector net debt was £138.5 billion, around half the level of a year earlier. So Sunak may have around £25 billion more to use in this statement than previously expected, and still be able to stick within his fiscal rules. He thus has the opportunity as well as the need to provide some help this week.

What then of the actions that can be taken? There are two areas he should focus on.

One is actions linked to the war, such as more immediate defence spending or help for refugees. The other is finding money to cushion the cost-of-living crisis.

While he may mention issues linked to levelling up and incentives to boost investment and improve skills, the bulk of tax changes and spending announcements linked to these will have to wait until the Budget in the autumn.

The imminent cost-of-living crisis is explained by higher inflation, rising fuel and energy bills, and increased taxes. The approach that the Chancellor is likely to take to address these is best captured by the three “t’s” – timely, temporary and targeted measures.

Even though people across all incomes, including the squeezed middle, are being impacted, help will be targeted to those on low incomes and most in need.

The rise in inflation is out of his control. But we shouldn’t pretend that no-one is to blame. Costs have risen across the board – initially because of supply disruptions triggered by the pandemic and now because of the war. At some stage these pressures will ease, but not yet.

But inflation has also risen because the Bank of England has been asleep at the wheel. Last year, when inflation was already rising, it printed an excessive amount of money as quantitative easing reached £895 billion. That made the inflation outlook worse, feeding inflation expectations.

The Chancellor can act on fuel duties. During the next fiscal year, fuel duties are expected to raise £28 billion. By comparison, income taxes will raise £229 billion and national insurance £182 billion. A bold step would be to suspend fuel duties completely for a period. But then the pain would be felt when reintroduced.

Indications are that fuel duty will be cut, perhaps for a temporary period. A similar approach has been seen recently in France and Ireland.

For example, take a litre of petrol at £1.65. This price includes fuel duty of 57.95 pence and VAT of 27.5 pence. So total tax is 85.45 pence

If fuel duty is reduced by five pence per litre, then, after taking into account VAT, this would reduce the price per litre by six pence, in this case from £1.65 to £1.59. A small but significant saving for many people.

A radical – but very unlikely – step would be to move environmental levies from fuel bills onto general taxation. From this April these levies on household energy bills will raise £9.2 billion over the fiscal year, around £325 per household per year. The importance of addressing climate change is critical, it is peoples’ ability to pay that is the issue. This leads onto the big issue that Sunak needs to address: taxes.

Two tax increases will bite this spring. There is fiscal drag: as pay creeps up it drags people into higher income tax brackets. Normally, this is addressed by allowing tax allowances to rise in line with inflation. Allowances have been frozen for a couple of years, so it is unlikely anything will change here.

The other tax is the increase in national insurance, which will rise for both workers and employers, and which comes into effect in a couple of weeks. For workers this rises from 12 per cent to 13.2 per cent, so someone earning £30,000 per year will pay £214 more and a £50,000 earner will pay £339 more.

In April 2023, this is replaced by a new health and social care level (which in all likelihood will rise in future years) and the national insurance rate falls back to 12 per cent.

There was no need for this tax to have been increased in the first place. It was already clear last autumn that the public finances were improving. Furthermore, it is a tax on jobs that it is coming into effect now when incomes are being squeezed.

Sunak appears keen not to reverse or delay this tax. Instead, he could raise the threshold at which national insurance is paid by workers. From April, national insurance is paid after you earn £190 per week. By contrast, the threshold for paying income tax is based on annual income but is equivalent to £242 per week.

The Chancellor also recently announced measures totalling around £9 billion to help people most in need. He could find other targeted help. For instance, benefits and allowances could be raised in line with latest inflation figures.

One lesson from following fiscal statements over the years is that, when it comes to chancellors, don’t just listen to what they say, watch what they do. During the pandemic, Sunak responded well. Further action is needed now.

Finally, despite uncertainty, it will be important for the Chancellor to outline a vision. The UK’s trend rate of growth is too low. The UK needs to become a more competitive economy. Sunak wants to reduce the budget deficit. That is understandable. His choices are: borrow, raise taxes, austerity via cutting spending, focus on boosting growth – or a combination of these.

Austerity is rightly ruled out, although public sector reform is needed. The trouble is that taxes are already high, even for people on modest incomes. The best way to reduce the deficit is to boost economic growth, allowing the ratio of debt to GDP to come down gradually, over time.

Anthony Browne: Now is not the time to go slow on Net Zero

21 Mar

Anthony Browne is MP for South Cambridgeshire, and chair of the All Party Parliamentary Group on the Environment.

Does the invasion of Ukraine – and the commodities price crisis that it has exacerbated – mean we should “press pause” on Net Zero? Gas and petrol prices have rocketed up in the past few weeks, increasing the cost of heating and driving, and causing real financial pain to households, particularly those on lower incomes. The Government has unleashed a £9 billion package to bring bills down, but there is a limit to how much it can buck global markets. The call has come for further action – in particular, to start fracking in the UK again.

I fundamentally disagree that Net Zero needs to be paused. Many of the arguments put forward are not just self-serving, but patently irrational. If they were acted upon, we would be repeating rather than learning from the mistakes of the 1973 oil price shock.

I have always seen three major reasons for aiming for net zero – one is to curb climate change, and the other two are to enhance national security and to improve economic resilience.

Weaning ourselves off fossil fuels – which is completely achievable – is not only critically important for the environment, but would mean that we would no longer be funding and dependent on some of world’s worst authoritarian regimes, and the change would make our economy more resilient against volatility in global energy prices.

In 1973, a six day war in the Middle East produced an oil price shock that unleashed explosive inflation and a deeply scarring recession, sending our economy into turmoil for nearly 20 years. That is a critical weakness on an otherwise powerful, diverse economy.

Our economy is less dependent on oil prices now than it was – the energy intensity of GDP has fallen – but we are still vulnerable, as we are experiencing.

After 1973, other countries had deliberate strategies to wean themselves off oil – France went for nuclear power, Denmark for wind power, and Japan for solar. By contrast, we went for North Sea 0il. But since our output is part of global markets, that did nothing to insulate us from global price shocks.

We have more recently boosted renewable energy. Few people realise that more of the UK’s national electricity supply is now produced from wind power than it is from gas. No foreign dictator can stop the wind from blowing on these shores. The fact that over half our electricity comes from zero carbon sources (wind, solar and nuclear) means that its price has been less volatile than if it was produced solely from oil and gas, whose prices are decided by highly volatile international markets.

France, where nuclear power generates three quarters of electricity, and Norway, which is 100 per cent hydroelectric, have suffered from electricity price spikes, but only because they have been exporting power other countries which are vulnerable.

North Norway, which is isolated from the main European power networks, has seen more stable electricity prices from its hydroelectric plants. Two thirds of Norway’s homes are warmed by electric heat pumps, and so are not directly affected by global gas prices.

The UK could produce more fossil fuels, but the UK cannot much influence international oil and gas prices, whether it fracks or not. For as long as our heat and light and transport depend on fossil fuels, we will still be at the whim of international markets. 

But imagine if all our (and Europe’s) electricity production were from zero carbon sources – renewables and nuclear – and if we drove electric vehicles, and had electric heating for homes, then homeowners and drivers would be more insulated from international energy price movements and no longer funding foreign dictators.

The answer to the current crisis is more people driving electric cars, and less electricity produced from fossil fuels – not pressing pause on Net Zero, producing more fossil fuels and doing less to get people to drive electric cars and heat their homes with electricity.

That would simply exacerbate the problem, not solve it. You won’t make the UK less hostage to global fossil fuel prices by making the UK more dependent on fossil fuels. We need to learn from 1973, not repeat the mistakes.

As we get to Net Zero by 2050, there will still be a continued demand for oil and gas as transition fuels, and there will be some residual demand afterwards for industries such as chemicals.

Where that fuel comes from is less an environmental issue than a security one. Since Russia only supplies four per cent of our gas, it is not really an issue for the UK: giving the go-ahead to the wind farms and solar farms already in the pipeline will more than make up for the shortfall from Russia.

The energy gap is more an issue for the EU, which is heavily dependent on Russian oil and gas. If Europe stops buying fossilsfuels from Russia, it will have to buy them from elsewhere, but that does not in any way mean it needs to stop aiming for Net Zero.

The Russian invasion in Ukraine is not a reason to give up on Net Zero. Rather, it is a reason to redouble efforts to get there as quickly as possible.  That will benefit the environment, economic resilience and national security.


John Redwood: My critique of the Chancellor’s Mais Lecture, and what the Government should do next

7 Mar

Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.

Amidst all the harrowing reports from Ukraine and the deaths and destruction wrought there by Russia, the Chancellor has sought to chart a course for the economy for the next couple of years.

In his Mais lecture he echoed his predecessor, Philip Hammond, in seeking a productivity breakthrough. He also reaffirmed the Maastricht rules approach to economic management, wanting tax rises to get the deficit down first. The Treasury should note that its role model the EU has abandoned these rules for the time being, and is pursuing monetary and fiscal expansion.

The lecture was wrong to deny that lower tax rates can bring in more revenues. The Republic of Ireland has been a shining example of this, boosting its per capita GDP far higher than ours or the lower level of the  EU by attracting huge investments through a 12.5 per cent Corporation Tax rate.

Their business taxes offer a higher percentage of total tax take than our higher rates. The Chancellor ignores the findings of Margaret Thatcher and Nigel Lawson who he praises. They produced a surge in revenues from higher paid people by major cuts in income tax rates.

The Government should take the cost of living crisis more seriously. In accordance with the Mais lecture, it needs to create the conditions for private sector investment in creating more better-paid jobs and in producing more of the goods and services we need at home.

Levelling up needs to be private sector led, and offer people the chance to set up and run their own businesses, be trained for better paid employment, and find ladders of opportunity in the areas attracting the projects and businesses.

The Government should not take the fast growth rate of 2021 for granted. It was a one-off based on removing Covid restrictions and on an unprecedented injection of money by the Treasury and the Bank of England. In the end, they overdid it in scale and duration, triggering a nasty inflation. The new investment has to take place against a less supportive public sector background.

The rise of prices well above wages will cut growth, as people spend more of their money on such basics as food and energy. That will leave them with less to spend on leisure and pleasure – on items that are nice to have. The huge rise in energy bills alongside tax rises including National Insurance will sap spending power further. The economy will slow. The lecture did not tell us how the extra private sector investment will be attracted in these conditions, particularly with the planned rises in Corporation Tax to come.

These troubles will be compounded by the Government’s import promotion policies, which are most pronounced in the Business and Agriculture departments. Business is busy allowing the rundown of big energy using manufacture like steel, ceramics, aluminium, and glass in the name of Net Zero.

The trouble is that we then import the products from abroad, meaning that more C02 is created in their production and transport to us. The Business Department is busy reducing our oil and gas output so that we need to import more energy. Again, this adds to our CO2 production worldwide.The Environment Department is developing big subsidy incentives to remove land from food production and to encourage older farmers to give up. That will make us more dependent on imported food.

So why does the Government not like products made or grown at home? Why doesn’t it want more home output to boost jobs, incomes and lifestyles? Any sensible programme of levelling up should be cutting taxes and making it easier for local businesses and farms to set up and grow.

This year, revenues have come in much higher than the Budget forecast, thanks to higher growth – and way higher than the £12 billion that the Government says it needs for a tax rise. The Treasury did not put up rates of tax, so revenue grew. During the next financial year, higher tax rates and frozen starting levels will hit taxpayers hard. Revenue is likely to underperform as growth stutters.

An energy shortage is a big part of the problem. The government should ease the shortages of gas, oil and electricity. They should invite in the oil and gas producers in the U.K. and help them increase production straight away from current fields. They should offer licences for new production from all those new and extended fields that have already been discovered. That’s more jobs, better paid jobs, and plenty of extra tax revenue. It is also less CO2 generated globally, as our own gas produces under half the CO2 of imported LNG gas. We will have much more productive industry if we have cheap or competitive energy.

The Government should work with the electricity industry to keep the lights on. We  will need more capacity than is planned to cover the electric revolution. We need more power for when the wind does not blow and the sun does not shine. We should abandon the current policy of putting in more and more interconnectors to allow us to import more from an energy short continent.  They should produce schemes to promote more home-grown food.

Steve Baker: Wanted – a politically and economically viable path to low emissions

23 Feb

Steve Baker is MP for Wycombe, and served as a Minister in the former Department for Exiting the European Union.

No serious person doubts that CO2 is a greenhouse gas or that human emissions of it have contributed to our changing climate. Our legal target of Net Zero carbon emissions by 2050 is water under the bridge, nodded through without a division in parliament despite the scale of the implied changes to all our lives.

I admit I will miss petrol engines, especially in motorcycles, but I have no in-principle objection to Net Zero – other than that there has never been a democratic choice about a policy which means, as our Chief Scientist, Patrick Vallance, wrote in the Guardian, “transformation is required at every level of society”.

My objections are practical questions about how we get there – questions usually evaded by turning back to what we ought to do and why, or by doubling down on misinformation. That can’t go on because socially, economically and politically-unviable policies will not survive contact with the public.

Our current energy crisis is substantially a result of the emissions reduction policies of previous governments, particularly Tony Blair’s. Blair changed course away from the gas and nuclear path established by Conservative governments, which had reduced prices while cleaning up electricity generation and domestic heating. Blair’s renewables drive, which was maintained by all subsequent administrations, has left the UK critically exposed to the regional price of gas, because it is natural gas alone which ultimately guarantees security of supply for the UK electricity network.

It’s rational to have a climate policy, but our climate policies aren’t rational. Our acute crisis is a result of chronic, long-term strategic extremism in energy and climate policy. Policy which has been naïve about geopolitical realities, too inflexible, too dogmatic, too hasty and far too expensive.

Just as with our Covid response, the root of our problems is a failure to conduct robust cost–benefit analysis while focussing too narrowly on a particular problem.

Economists can value the harm done to human welfare by emitting a tonne of carbon dioxide – the Social Cost of Carbon. Estimates vary, but most think it is somewhere between £10 and £40. So if reducing emissions by a tonne costs over £40, we are probably doing more harm to human welfare than the climate change we are trying to prevent.

That is, above £40 per tonne the cure is worse than the disease. Worryingly, nearly all our climate policies are significantly more expensive than the social cost of carbon. Onshore wind costs over £100 per tonne and offshore over £200. Rooftop solar can cost over £1000 per tonne.

In 2009, the then government stopped using Social Cost of Carbon, and switched to what is a called a “Target Consistent” value, which is the price that will have to be paid to meet the target. That is, government stopped considering the overall welfare of the population, focussing instead on meeting the targets.

That change is even more important now we have a Net Zero target. By neglecting the already strained budgets of British households and by loading the public with more and more ambitious targets – for renewables, and heat pumps, for EVs, you name it – ministers have put climate policies on a collision course with socio-political reality.

We are seeing the first signs of public resistance now, and the situation will not improve on our present course. A rational policy for reducing emissions must deal with runaway cost problems, growing concerns about security of electricity supply and pressure on business competitiveness.

The cost to consumers of the renewables drive now stands at around £14 billion a year, around £500 per household. Most of that is subsidies, but the cost of dealing with the intermittency of wind and solar is also rising alarmingly. Despite that vast expenditure, once one sets aside incorrect claims which could amount to misinformation, hopes that renewables would become significantly cheaper have been disappointed. The industry claims their capital and operating costs are falling, but their financial accounts tell a different story. And there is a large queue of renewables operators with rights to extraordinary, index-linked levels of subsidy.

On our current path, there is no scenario in which energy prices return to normal in the next decade. It’s anyone’s guess when this unsustainable position will end but end it must. In the short term, we must cut the multi-billion pound cost of green levies, and admit they have not succeeded and bring these programmes to an end.

We will also need a different medium and longer term approach, reducing emissions but being realistic about what can be engineered at reasonable cost to the British people. We need to think a little less about the targets, and much more about what people can afford.

That leads us to a strategic gas-to-nuclear policy, not all that different from the sound Conservative energy policies inherited by Tony Blair and trashed. Government must allow people to go on using their gas boilers for longer, perhaps mixing in hydrogen, and not force the adoption of heat pumps. The drive to EVs should be relaxed: Government is demanding too much too quickly.

Ministers should restore confidence in North Sea oil and gas exploration to increase domestic supply of these fuels. And it is time to get on with using shale gas. Thanks to outrageous misinformation, the public are concerned about fracking, but the evidence shows it is a technique which can be safely used.

Natural gas is an excellent and a clean fuel. It can give us time to start a major rebuild of nuclear electricity generation. There are real signs that advanced modular reactors are the answer to the production of high-grade industrial heat, one of the hardest areas to decarbonise without pricing our manufacturers out of the international markets.

In the future, there may even be nuclear fusion, but banking on it would be a huge gamble. We will need to maintain a sophisticated and capable society if we are to overcome that technology’s known difficulties, and that means keeping energy costs low today.

The quickest win for the public and the government would be to encourage the construction of a new generation of gas-fired power stations. These would have much higher efficiencies than the existing fleet, which is mostly rather old, and could reduce wholesale electricity prices by as much as a third.

This gas-to-nuclear policy is a sound, balanced approach to emissions reductions. It doesn’t rule out anything – there can still be voluntary adoption of heat pumps and EVs – but it allows the public much more freedom to decide what works for them and how fast they can afford to decarbonise.

That is rational. That is Conservative. And it would work.

Tony Lodge: Heath, Thatcher, Major, Blair – and the litany of errors that left us dependent on gas imports

22 Feb

Tony Lodge is a Research Fellow at the Centre for Policy Studies.

Britain and its leaders are learning the hard way. For the first time since the early 1970s, the country is facing an energy cost and supply crisis and – as then – a Conservative Prime Minister is largely helpless as he grapples with the climax of bad policy making which stretches back over a generation.

Whilst Edward Heath in 1972 faced the wrath of coal unions who had been allowed a stranglehold on energy supplies for too long, Boris Johnson endures a far worse situation – Britain’s growing inability to generate and supply the affordable power it needs. This is coupled with a desperate and growing dependence on imports of gas and electricity to keep the lights on, homes warm, and industry working.

The biggest domestic story of 2022 is likely to be energy prices. Forget parties at Number 10, channel migrants, or Covid fraud. The real crisis for Conservatives will be the steep rise in household bills, and the clear and obvious inability of Ministers to do much about it. Expect power company CEO summits in Whitehall, more urgent statements in the Commons and more public spending intervention to artificially fix prices.

On energy strategy, Britons have endured an unrivalled record of bad policymaking since the 1970s. Contradictory plans and missed opportunities have seriously eroded security of supply, affordability and helped drive jobs and key industries overseas. The die is cast for the short term and here is why.

Lessons could have been learned and the right decisions taken in the 1970s, 80s and 90s, but were ducked. We are now paying the price. The right policies then would have shielded Britain now from a creaking system which is wildly exposed when the wind doesn’t blow, and we desperately hold out for the next shipment of liquefied natural gas (LNG) as North Sea supplies fall and gas storage remains poor. How did it come to this and what can we do?

Following his mauling in the first miners’ strike of 1972, Heath foolishly rejected a plan to build over 30 new nuclear reactors totalling almost 40 gigawatts (GW) of new electricity generation. The first plant would have opened in the early 1980s, started insulating Britain from high oil prices and helped wean the country off unionised coal.

Surprisingly and regrettably, Heath, the great Francophile, had ignored the bold plan and leadership from France to build no less than 40 nuclear plants between 1965 and 1985, which today still generate around 70 per cent of comparatively cheap electricity. Instead, Heath left the field open for Labour plans to increase coal burn via the 1974 ‘Plan for Coal’.

In 1980, Margaret Thatcher announced plans for eleven large reactors totalling 20GW of new electricity capacity, but only one was built at Sizewell. The then huge oversupply of coal, power generation overcapacity, abundant North Sea gas and a deep recession had together hurt the short-term commercial case for new nuclear build.

As coal wasn’t the answer and the case for nuclear lacked friends, Britain turned to its precious North Sea gas resource. It is this choice which is now hurting and will continue to do so for some time. The 1990s ‘Dash for Gas’ has led to Britain becoming one of the world’s largest gas consumers per capita, both for household use and particularly for the generation of electricity. Over 30 years, Britain’s North Sea gas bounty has been squandered to a perilous state where supply is increasingly now met from imports.

John Major and his ministers were warned during the early 1990s that the UK Continental Shelf (UKCS) would be significantly run down by the mid-2000s if the proposed fleet of large new gas burning powered stations went ahead. Michael Heseltine reassured the Commons in 1992 that UK gas reserves would last for 55 years. He was wrong.

Many argued, including the then Chairman of British Gas, that North Sea natural gas is a valuable premium fuel and should not be wasted to generate electricity, where 50 per cent of its efficiency is lost in the process, unlike when used for direct heating or cooking. This argument was lost and gas replaced King Coal, generating over 50 per cent of UK electricity for the first time in 2010.

Britain’s gas overdependency and growing electricity import habit is the problem, and I first highlighted this for ConservativeHome 13 years ago. The focus must now be urgently to prioritise more domestic gas exploration and extraction, stop supporting plans to import more untaxed electricity from overseas and now turbo-charge new nuclear power. The latter should receive the same focused policy support as that enjoyed by those tasked with beating Covid.

This strategy must surely be Treasury-led. After all, when gas is produced overseas the Treasury loses huge revenues. When electricity is increasingly imported from Europe (as a result of the EU forcing Britain to close power plants early), its generation does not pay British carbon or transmission taxes because the power plants are overseas. Britain is offshoring its fuel supplies, power generation, and consequently losing billions in revenue alongside the erosion of energy security.

Between 2019 and 2020, liquefied natural gas (LNG) represented 40 per cent of all gas imports compared to an average 14 per cent in 2017/18. Imported gas pays no corporation tax in the UK, but it is perversely treated as producing ‘zero emissions’, despite it travelling thousands of miles by ship and carrying a large carbon production footprint. It therefore doesn’t face the same carbon costs, as UK producers which means gas imports are effectively subsidised compared to home production. This import dependency could reach as high as 75 per cent within the next 10 years, so new price spike crises are guaranteed to increase in frequency.

Britain’s dash for gas was a medium-term fix based around a once rich but now dwindled national resource – which has led to huge over-exposure to volatility and imports. Everything must now be done to invest in new domestic gas production to help us through, whilst prioritising the transition to new nuclear power with which renewables and green storage will co-exist. We must stop offshoring our ability to keep the lights on and keep households warm.

Edward Heath lost in 1974 after his second battle with the miners, the three-day week and soaring prices. Conservativs should beware.

Sanjoy Sen: Our current energy problems have been a long time in the making. It’s time for a rethink.

16 Feb

Sanjoy Sen is a chemical engineer. He contested Alyn & Deeside in the 2019 general election.

Energy is complex. Policymakers constantly wrestle with a trilemma of how to keep prices low, reduce emissions and maintain security of supply. All whilst demand soars (rising population, improved living standards) and new challenges emerge (electric vehicles, environmental legislation). It’s never going to be perfect.

But when the Chancellor has to sub you two hundred quid to keep the lights on, it might be time for a bit of a re-think. Our current energy problems have been a long time in the making and clearly can’t be fixed overnight.

But we do need to start by recognising what is and isn’t working. And coming up with some alternatives, both short- and long-term. The public needs this urgently – and our electoral fortunes depend on it.

Keeping prices low

By 2017, the concept of a price cap had morphed from Milibandian Marxist madness into sound conservatism – and my concern was that we weren’t levelling with the public. Generating energy and distributing it to every single home is an expensive business. Yet we were determined to keep daily utility costs cheaper than a take-out coffee – even whilst factoring in green levies.

The first consequence of promising to drive prices ever downwards was that there could never be a price point which the public would consider acceptable. Meanwhile, attempts to introduce apparent competition ended predictably: the numerous defunct businesses weren’t increasing our energy supply, they were simply buying others’ output and selling it on. Any market shock was always going to leave them exposed. And the price cap that drove them out of business is now meaningless to voters.

Tackling emissions

The most cost-effective means of delivering the low carbon power needed to meet Net Zero remains large-scale nuclear. (In fact, it’s also the best option even if you don’t much fancy Net Zero, as it delivers big, steady outputs without dependence on imported gas.) Sadly, the much-delayed, over-budget Hinkley Point C is fast becoming a textbook example of how not deliver it. The technology remains unsurprisingly problematic and its delivery lies in the hands of France and China, countries with whom we now enjoy dismal relations.

And as nuclear has faltered, our dependence on alternatives has increased. Renewables clearly have a vital role to play and it is encouraging that the UK is world number one in offshore wind capacity with more to follow. But we need to reflect on whether such heavy reliance on intermittent sources is the most cost-effective and reliable solution, especially when energy storage and the hydrogen economy are still under development.

Security of supply

As I noted after COP26, Narendra Modi recognises the consequences for India of ditching cheap, domestic energy: unemployment and rising prices that disproportionately hit the poorest. Plus the political ramifications of over-dependence on imports. Would that EU leaders felt the same. Proudly shuttering their own generating capacity, their citizens’ energy supply has never been more precarious. Germany is conspicuously silent with Vladimir Putin’s hands on the NordStream gas taps as he surveys Ukraine.

Here in the UK, we might have been in a stronger position thanks to our domestic assets. But we needed to back the giant Cambo North Sea development when it came under fire. And closure of the Rough gas storage facility eliminated our ability to buffer against market spikes.

So, where next?

New policies require a change of mindset. The public have always prioritised the cost of living and job creation – even more so following recent price shocks and Covid. We need to get back to those priorities. And we need to remember where our support now is: banning a Cumbrian coal mine doesn’t gain us much in north London but approving it is likely to go down very well locally.

In the short term, we need to start backing domestic energy production again. The North Sea may be past its peak but viable reserves remain. Options for gas storage re-instatement should also be investigated. Critically, potential investors need to be reassured that the offshore sector enjoys unswerving government support. Far from a political liability, there is much to be gained here, especially with an SNP administration dependent upon Green support.

Longer term, we need to get big nuclear back on track quickly via a range of partners. Plans were shelved in Cumbria, Gloucestershire and Wales in 2019 but interest remains strong if government support exists – it’s time to get after these urgently. (But this time, let’s use some proven technology, please.) And looking further ahead, we need to keep backing Rolls-Royce in their development of Small Modular Reactors. If we’re going to do this, it’s going to need continued support, not a loss of heart if the first one doesn’t go exactly according to plan.

Just as we tackle our current problems, new ones will inevitably emerge. China dominates the battery supply chain, an increasing concern as transport becomes electrified. We already need to start thinking about sourcing domestic supplies (Cornish lithium) and the recycling of spent batteries to hedge against future supply issues. Energy policy doesn’t get any easier but we do need to keep re-assessing – and changing tack where necessary.

Virginia Crosbie: Nuclear is key to securing the UK’s energy future

10 Feb

Virginia Crosbie is the Member of Parliament for Ynys Môn.

Nuclear power has a key role alongside renewables in the UK’s clean energy transition through supporting both reliable, low-carbon electricity generation and the future production of hydrogen.

With the lowest lifecycle carbon footprint of all the energy sources, the Government has committed to continuing its development of large and small scale reactors. This has been outlined in several key policy documents, including the 2020 Energy White Paper, the National Infrastructure Strategy, the Prime Minister’s 10 Point Plan for an Industrial Revolution, and most recently the Net Zero Strategy.

My constituency of Ynys Môn (Anglesey), also known as “Energy Island”, is well placed to become a hub for nuclear and other low-carbon energy generation, given its location and skills base, both here and across the wider region. It is particularly encouraging therefore that the Government has shown clear support for the continuation – and expansion – of the nuclear industry in the United Kingdom.

I chair the Nuclear Development Group (NDG) and All Party Parliamentary Group (APPG) on Small Modular Reactors (SMRs), which look to support the deployment of all three “classes” of nuclear – SMR, AMR and large scale and to work with Government and industry on how best to accelerate such a deployment.

Nuclear is one of the largest sources of clean energy used today and will continue to play a critical role in providing clean and affordable electricity. In the future, nuclear will contribute to decarbonisation through heat and hydrogen production, as well as continuing the production of low-carbon, reliable electricity through large, small (SMR) and advanced reactors (AMR). The use of modular manufacturing and changes to nuclear financing will make reactors easier to deploy in pursuit of our net zero goals.

Furthermore, the high temperatures produced by Advanced Modular Reactors (AMRs) could be used directly for Foundation Industries that require continuous and intense heat, whilst the output can also be used in the production of synthetic fuels, such as those being developed for low-emissions aircraft. The Government is taking steps now in order to support the development of small-scale nuclear so that it will play a key role in delivering Net Zero by 2050.

To ensure that the UK can harness this potential, it is imperative that the civil nuclear industry retains its talent and nurtures the next generation. Through apprenticeships, graduate scheme opportunities and the 60,000 highly skilled workers already employed in nuclear, the industry is investing in the skills and development of its workforce right across the UK.

Not all roles mean you need to have a PhD in nuclear physics! The nuclear sector offers a range of apprenticeships as well as graduate positions which can build the skills base ready for new build projects and work across the nuclear fuel cycle in both the civilian and defence fields. Careers are not just limited to technical and engineering roles either, with demand across roles in legal, finance, marketing, and communications, to name but a few.

The age profile in nuclear, like many technical fields, is skewed to the right and can provide large numbers of well-paid jobs across the nuclear supply chain to school, college and university leavers. New nuclear power plants can expect to operate for 60-80 years followed by 15-20 years of decommissioning, providing employment for generations of families, both directly within the facility and indirectly in the wider supply chain. This economic benefit spills into multiple sectors, from the local tax revenue to the provision of services to employees and supply chain partners from haircuts to healthcare.

If we are to meet our climate change commitment, the UK urgently needs to replace and build more nuclear power plants. New nuclear can bring major economic, social and environmental benefits for Ynys Môn and the UK. I remain very hopeful that by working with Government and organisations across the nuclear supply chain, we can see nuclear investment come to Ynys Môn and the wider economy, levelling up areas that have been forgotten and advancing the decarbonisation agenda.