National Grid boss given £1 million pay rise, despite biggest blackout in a decade

The chief executive of National Grid had been given a £1m pay rise, less than two weeks after Britain experienced its biggest blackout in a decade.

John Pettigrew was paid £4.56m for the last financial year to reward his “strong performance”, according to the company’s annual report.

This pay packet is an increase from the year before when he was paid £3.65m.

According to The Guardian, National Grid’s remuneration committee praised Pettigrew, 50, for delivering “a strong performance in his third year in the role” and delivering value to investors and shareholders.

Major energy blackout

A sign is seen outside the National Grid station [Photo: Getty]
The blackout which which took place on 9 August caused nearly a million homes to be without electricity and left hundreds of thousands of people stranded as transport networks collapsed.

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Series of avoidable failures led to worst blackout in a decade, National Grid tells regulator

The power outage amounted a five per cent reduction in Britain’s overall electricity supply, however the country was sent into meltdown with one million homes sent into darkness and chaos on the railways at the height of rush hour.

Local distribution centres severed power for train signalling stations, grinding Britain’s railway to a halt and causing Govia Thameslink trains to shut themselves down, with more than 20 unable to be restarted by drivers.

While experts say the outage was “extremely rare”, some suggested that if National Grid had spent £170 million more a year on back-up systems, it could have mitigated the sudden drop in electricity frequency that escalated the crisis.

Government probe

National Grid gave its interim report on the blackout to energy watchdog Ofgem last Friday. The findings are expected to be published on Tuesday.

People waiting outside of King’s Cross station, London, as all services in and out of the station were suspended, after a large power cut [Photo: PA]
A full report on the incident is expected by early September.

National Grid is also facing a separate government probe by the energy emergencies executive committee, the findings of which within the next 12 weeks.

Following the outage National Grid said the “unexpected and unusual event” had been caused by the loss of two generators which led to a steep drop in the grid’s overall frequency.

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UK freight industry says it’s ‘shooting in the dark’ on no-deal Brexit

The leak of Operation Yellowhammer, the British government’s no-deal planning dossier, indicates a hard Brexit would be “far, far more potentially disruptive” than industry has been told to prepare for, according to the Freight Transport Association.

The U.K. government must urgently clarify what it predicts the impact of no deal will be for moving goods into and around Britain, James Hookham, deputy chief executive of the Freight Transport Association (FTA), told POLITICO’s London Playbook.

The FTA was particularly blindsided by the suggestion in the leaked document that the government’s own no-deal zero-tariff policy could hit the U.K.’s domestic fuel industry, leading to the closure of two refineries, strikes and disruption to fuel availability, Hookham said.

While he said the FTA had not seen the original Yellowhammer document, Hookham added: “That really frightened me, because that’s clearly got the potential to disrupt all U.K. goods distribution activity and commercial activity, if the domestic fuel supplies are under threat. That’s certainly never been raised with us before.”

He continued: “We’re calling for some kind of independent review of the evidence and the scenarios that the government’s using, just to get it all out on the table. What we’re feeling now is that we’re just shooting in the dark, we’re being asked to prepare for something that we don’t fully understand and that the government’s not prepared to share with us … All of a sudden this isn’t just queues at Dover … this could have a knock-on effect to all domestic goods distribution and that is orders of magnitude more than we were led to believe might happen.”

Any threat to fuel supplies would be a “game-changer,” Hookham said, and urged the government to be open about its expectations to help industry prepare. “What we want now is just some honesty and some clarity. How can we help to mitigate this if we don’t know what we’re trying to solve?”

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Will Nicolle: Be ambitious in the fight against air pollution

Will Nicolle is a researcher at Bright Blue and co-author of its latest report, ‘Emission impossible?

Since the first Clean Air Act 1956, introduced by a Conservative Government, the UK has enjoyed considerably cleaner air. But stronger evidence has emerged in recent years about the detrimental impact of air pollution to human health, the economy and the environment. Consequently, there is growing public and political pressure for tougher action to reduce levels of air pollution in the UK.

In Bright Blue’s new report, Emission impossible?, we found that a clear majority (71 per cent) of UK adults reported that they were concerned about the impact of air pollution on the health of themselves and others. And a clear majority (69 per cent) of adults agree that the Government should reduce air pollution below current levels.

Air pollution is damaging for our health in a myriad of ways. The air pollutants Nitrogen Dioxide (NO2) and fine particulate matter (PM) have been linked to higher incidences of cardiovascular and respiratory diseases, as well as higher incidences of dementia and depression. There are also costs to the environment – through, for example, nitrogen deposition affecting ecosystem dynamics – and the economy, through high concentrations of pollutants increasing the prevalence of sick days.

The UK currently meets all its legal limits and targets on air pollution, except for annual and hourly legal limits on the concentration of NO2. The UK is split into 43 zones for reporting purposes on the concentrations of different air pollutants. In 2010, 40 of these zones were reported as in breach of our legal limits on the concentration of NO2. Based on the most recent data, the UK still breaches its legal limits for NO2 in 37 of these reporting areas. And the transport sector is the largest source of NO2.

As we leave the EU, the UK Government needs new, ambitious legal limits, legal responsibilities and transport policies on air pollution. This country should aspire to be a global leader on yet another environmental issue, and strive to become the country with the cleanest air in urban areas in the developed world.

First, the Government should commit to adopting the ambitious World Health Organisation’s guideline limits on four air pollutants: PM, NO2, sulphur dioxide (SO2) and ozone (O3). Currently, the UK’s legal limits and targets for different air pollutants are EU-derived. Recently, DEFRA stated they believed the WHO’s recommended PM2.5 limit was “technically feasible”, but further analysis was needed as to its economic and practical feasibility. We recommend the Government adopts all the WHO guideline limits for different air pollutants as soon as possible, but only after a feasibility study.

In the future, the new Office for Environmental Protection (OEP), or even a new Committee on Clean Air, should have the responsibility to recommend future legal limits and targets for different air pollutants to parliament after conducting appropriate feasibility studies. This will be similar to the role of the independent and influential Committee on Climate Change in advising the UK Government on greenhouse gas emission targets, so that the setting of air pollutant limits and targets will be properly evidenced and scrutinised.

Second, to achieve these stricter limits, those who have the power to reduce air pollution should have clearer legal responsibilities. At the moment, local authorities are obliged to monitor, review and if appropriate take action in relation to the air pollution within their boundaries. But local authorities do not have a clear legal responsibility to reduce air pollution below legal limits. Equally, other public authorities that control some sources of air pollution do not face legal obligations to reduce air pollution levels to below legal limits in areas where they have authority.

We recommend that all local authorities have a legal requirement placed on them to achieve compliance with legal air pollutant limits in their geographic area of responsibility. We also recommend that relevant public bodies should have a new legal duty placed on them to contribute to achieving compliance with legal air pollution limits within their geographic area of responsibility.

Finally, bolder transport policies will be needed if the UK is to meet these new ambitious limits, especially for the air pollutant NO2.

Recently, it was forecast that Electric Vehicles will only be 75 per cent of new vehicle sales by 2040 based on current incentives – falling short of the Government’s target of phasing out fossil fuel car purchases by 2040. The expensive upfront costs of Electric Vehicles are a major barrier, so we recommend therefore that VAT should be scrapped on the purchase of all categories of Electric Vehicles in the UK.

Generally, arguments for the lowering of speed limits to 20mph in urban areas are framed in terms of public safety, but there is now also a solid evidence base to be made for it lowering air pollution from vehicles. We recommend that the default national speed limit on all ‘restricted roads’ in urban areas in England and Wales be lowered from 30mph to 20mph.

In the City of New York in the US, there is a system in place to allow citizens to report commercial trucks and buses that are idling for longer than the legal three minutes – or for longer than one minute if outside schools – through taking photographs and videos and filling out an online form run by the City of New York government. Citizens who report polluters get a 25 per cent share of the income from the fine imposed.

So, alongside new powers to enable local authority traffic officers to instantly apply fines for stationary idling, which the government is considering, we recommend local authorities with a charging Clean Air Zone should be required to introduce such citizen-based reporting of stationary idling. If a fine is imposed, citizens could receive a portion of the fine, with the remainder going to the local authority to be spent on other local air pollution abatement policies. We further recommend the government consult on expanding this citizen-based reporting system from the City of New York to passenger vehicles.

The UK’s departure from the EU means that there is an opportunity to raise air pollution standards in the UK. Post-Brexit Britain should introduce ambitious limits and policies to be a global leader on clean air.

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From ‘Blade Runner’ to Brexit in England’s industrial north

MIDDLESBROUGH, England — Boris Johnson has a plan to turn the U.K.’s old industrial port towns into freewheeling outposts of “global Britain.”

The plan means setting up so-called free economic zones offering lower import taxes and looser regulation to lure investment in up to 10 ports. It chimes with the swashbuckling Brexiteer vision of an outward-facing British economy restored to its glory days, and also spins a positive view of the country’s future outside the EU.

“Let us begin work now to create free ports that will drive growth and thousands of high-skilled jobs in left-behind areas,” Johnson pledged outside 10 Downing Street after becoming prime minister. In one of the candidate areas, Teesside, on Friday, International Trade Secretary Liz Truss will announce the appointment of a panel of ministers and experts to figure out the “world’s most advanced free port model” that will generate “thousands of jobs.”

But will it work?

Ben Houchen, the 32-year-old Conservative mayor of Tees Valley, a cluster of deprived cities in the northeast of England, wants to get the green light to start a pilot project around the mouth of the River Tees. He reckons free ports offer a “physical representation” of how Brexit can “deliver more control and say over international trade policy.”

The 20-minute train ride from Thornaby to cheery seaside town Redcar trundles past the skeletons of shuttered factories and steel plants.

“I get extremely frustrated as people talk about this very dismissively,” Houchen said in his office overlooking the river just days before Truss’ visit. “One of the reasons we came up with the concept 18 months ago is that there was such a negativity about Brexit.”

He’s pushing to make a free economic zone out of a 4,500-acre site around a shuttered steel works, six times the size of London’s City banking district. The goal is to transform the region by attracting new clean energy companies and manufacturing at the deepest port complex on England’s east coast, he said.

The plan may be novel for the Tees, but it isn’t new. A U.S. Congress report estimated there were more than 3,000 free economic zones worldwide in 2013. Britain closed its last free port in 2012, although there’s one on the Isle of Man, a U.K. crown dependency outside the EU. There are more than 80 across the EU offering various kinds of relief from taxes and tariffs to spur growth.

The top of Eston Nab in North Yorkshire, which looks down at the view over the industrial area of Teesside and Middlesbrough | Dan Kitwood/Getty Images

But the U.K. is dreaming bigger.

“What I’m talking about is not comparable to those in the EU,” said Houchen. “What they consider a free zone is basically a large warehouse.” Instead, outside the single market, customs union and the EU’s state aid restrictions, he’s aiming for zones similar to those that have helped supercharge growth in the United Arab Emirates and the United States.

The plan

Whatever Brexit brings, the Tees Valley, which in 2016 voted heavily in favor of the U.K. exiting the EU, will feel the impact. Once a heavy industry jewel in the British economy, its horizon of furnaces, chemical works and docks inspired the opening cityscape scene in the 1980s dystopian thriller “Blade Runner.”

But its days of industrial glory are long gone. The 20-minute train ride from Houchen’s office in a newbuild complex at Thornaby, through Middlesbrough’s dilapidated central station, to cheery seaside town Redcar trundles past the skeletons of shuttered factories and steel plants.

In 2015, a steelworks overlooking the beach was closed at Redcar, costing 3,000 jobs. That delivered a body blow to the local economy, although chemicals processing and oil rig-scrappage plants still dot the landscape.

If Johnson’s team gives the go-ahead for the free port project, Houchen thinks 37,000 jobs can be generated within 20 years and around £2 billion added to the local economy. He argues that at least half of that will come along anyway owing to a shift to wind energy and hydrogen production in the region, but will be “turbocharged” by a free port zone bringing new manufacturing to the area.

The tanker Louise Knutsen is moored alongside an oil facility on the banks of the River Tees | Ian Forsyth/Getty Images

“This site is chemicals, processing, clean energy and energy production, it’s manufacturing and it’s heavy industry,” said Houchen. “We’re not trying to store goods in the zone [but] the reintroduction of the kind of jobs we haven’t seen in this area for decades.”

To do that Houchen talks of abolishing corporation tax, employee national insurance contributions and business tax rates for companies moving in, in addition to offering direct subsidies for research projects that will help foster innovation. The Department for International Trade said in a statement that the zones can relieve businesses of “unnecessary checks and paperwork, and include customs and tax benefits” while noting that some of the most successful areas mandate “liberalized planning laws.”

Around the Tees, it’s all about investing in industries that fit the region, he said, rather than trying to attract tech firms.

“We know we’re not going to become the next Silicon Valley,” said Houchen. “So we’re quite happy to exclude consumer tech; the Amazons and the Googles of this world. Stop them relocating to this area just to get tax breaks.”

The catch

But not everyone is as starry-eyed about the prospects for a free zone on the Tees.

“I think there are so many flaws in it that it’s unlikely to get a lot of traction,” said Peter Holmes, an expert on trade at the University of Sussex. “None of this is going to develop high-skilled jobs. They would be jobs in warehouses and assembly plants. These are not the kind of things that transform a region.”

Despite recent improvements, unemployment sits at just over 6 percent across the region — 2 percentage points higher than the national average. In Hartlepool, the furthest north of the conurbations covered by the Tees Authority, it’s close to 10 percent. Locals complain that while the number of jobs may be up, they aren’t the high-paying ones lost in the steel plants.

Slashing environmental and labor rules offers one option, but that’s something the Tees authorities insist they won’t do.

Comparisons to U.S. special economic zones aren’t entirely valid either, as companies there take advantage of higher tax on components than on finished goods. For example, car assembly plants benefit from importing parts to a customs-free zone and only pay taxes on the finished vehicle, which is taxed at a lower rate than the individual parts.

“This has absolutely no relevance with the EU tariff system,” Holmes said.

That pours cold water on the insistence that the 250 zones employing 420,000 people in the U.S. offer a model for Britain. “If the U.K. model is implemented as successfully, it could have a significant economic impact,” the Department of International Trade said.

It will also be a struggle to persuade the U.K. Treasury that the plan won’t displace investment from elsewhere in the country, and just siphon tax revenues through Teeside that would otherwise head straight for the public purse. Houchen insists that’s not the case, and incentives offered would attract new investment.

In addition, the move comes just as Brussels takes a keen look at free ports and their potential for crime and deregulation. The European Commission this month labeled such sites an “emerging threat” that offer crooks a way to launder cash and shift counterfeit goods, but this isn’t the model Teesside is looking at.

Stanley, one of the cheapest places in the U.K. to buy a house. Much of the North East of the United Kingdom voted to leave the European Union | Dan Kitwood/Getty Images

Depending on how hard the U.K. crashes out of the EU, the plan wouldn’t be covered by watchdogs in Brussels anyway.

Regardless, Houchen counters he’s got legal advice that is clear there won’t be a problem. “The one thing free zones don’t do is turn a completely useless site into a brilliant site,” said Houchen. “You can’t turn a site in the Sahara into an amazing free port.”

The quick take on special economic zones is pretty alluring — look at the transformation of sleepy towns in China and the Middle East into forests of glass skyscrapers and factory complexes. But the reality is trickier, especially in developed countries. Shannon, a once vital Irish refueling stop for transatlantic aviation but otherwise a provincial backwater, was turned into a hub for big business thanks to its free zone. Despite that success, Shannon has created only 7,000 jobs, a fraction of what Houchen is proposing.

Slashing environmental and labor rules offers one option, but that’s something the Tees authorities insist they won’t do, ruling out making the port a haven for migrant labor.

A British Steel manufacturing site in Skinningrove in 2017 | Ian Forsyth/Getty Images

But that may hobble the dreams of creating an economic powerhouse, Holmes said. “You’re not going to make much difference to this region unless you give a substantial change in the cost [for business]. The cost saving from the free zone itself is going to be minimal.”

Keeping locals onside with the plan is key to satisfying one of the underlying causes of Brexit — a feeling of disenfranchisement outside the country’s rich southeast. While lawmakers argue over multibillion pound new infrastructure schemes around London such as a third runway at Heathrow and a rail scheme to Birmingham, the north has been relatively starved of public investment.

“The north is just all rusted up,” one local on Redcar’s high street said, declining to offer a name given the febrile political climate. “It’s a brilliant idea if it actually emerges.”

This article is from POLITICO Pro: POLITICO’s premium policy service. To discover why thousands of professionals rely on Pro every day, email for a complimentary trial.

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The Economy is too important to be left to politicians

The history books may record why it was that when the North was at a Brexit crossroads the business community here remained largely silent during much of the period since the June 2016 referendum.  That it has eventually chosen to speak  up raises a question mark about why up to this point it decided not to, or couldn’t agree to. Even though there has been significant evidence of the Brexit threat to business and other sectors.

The decision to speak out has also raised the question about what the business community does next. Much of the research to date has been around the threat to businesses but the evidence has also revealed the importance of existing arrangements from a business, social and community perspective.  In other words greater flexibility around the border, since the dark days of border security, has been only positive in supply chain terms, ease of movement, VAT processes, to name but a few.  In short the opening up of the border has presented immense added value to the economy right across the island.

The Northern Ireland vote rejecting Brexit was never properly reflected given that business voice was largely silent and the political one divided. The politics won’t change but the new found voice has identified not just the threat but the real value that cross border trade represents.

So what does it do next?  Well since the statement it has been both lauded and condemned from each side of the Brexit debate, which may point to why it hasn’t spoken up in the first place.  But it may also point to a realisation that just like politics the economy is far too important to leave to the politicians.


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Required reading.

The British Irish Chamber has helpfully compiled a digest of headlines within the technical notices that the UK government has published  outlining preparations businesses and consumers should take in preparation for a “no deal” outcome in Brexit negotiations.

They are the first 25 of an expected 84 papers and cover areas including: importing and exporting; VAT; financial services; regulating medicines and medical equipment; farming; state aid; EU funded programmes; workplace rights; labelling; and civil nuclear and nuclear research.

The headline on VAT – it and customs duty are due on goods arrival in the EU.

While the news headlines, following publication,  focused on businesses trading across the border being advised to seek help from the Dublin Government the Chamber points out a major problem for those businesses –  there is little guidance on additional measures that may be introduced to accommodate this trade.



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