‘Labour must be noisier and bolder as it future proofs our energy system’

Since the blockade of Hormuz began, calls for the Government to permit new North Sea drilling licences have got louder and louder. 

As I’ve argued elsewhere, the claims for how North Sea oil and gas would help with bills or energy security are embarrassingly thin. There are some centrists supporting North Sea exploration in good faith. But there are plenty of advocates for whom this is just a stick to beat the government with.

Ed Miliband is not unfamiliar with this hostile media environment. His reaction has been to double down on clean energy,  as he demonstrated in his announcement and speech on Tuesday.That intervention could be interpreted as an attempt to combat the ignorance on this issue. But mainly it was a rallying cry for those already sympathetic to his cause.

READ MORE: Labour split over North Sea oil and gas drilling as fuel costs rise

Is there an argument for compromise: to bend rather than break? He might say he’s tried that, and look where it’s got him. DESNZ agreed a while ago to allow a limited amount of new oil and gas drilling under the current licences, without any noticeable political benefit. They are now determined to stick to their manifesto pledge not to grant new exploration licences.

It’s very simple. We have to keep this stuff in the ground, if we’re going to avoid condemning our children to catastrophic climate change and its terrifying economic and social consequences. This is yet another “What did you do in the war?” moment. Resistance in the face of the fossil fuel brigade is the only justifiable position.

But Miliband’s team make a very different argument. They say “doubling down” on clean energy is simply the rational political decision. Ignore Westminster’s discourse of energy-policy-but-make-it-culture-wars, they urge their party. It just doesn’t reflect the real world. 

That’s partly because most people are not engaged with the details of the energy market and the policies that affect it. Steve Akehurst, founder of Persuasion UK and expert on climate and energy polling, tells me that “You have to be a very particular kind of voter to have a very strong view on this. When we polled this in mid-April, it was still the same story. The small proportion of voters who are actively opposed to the government’s energy policy tend to be Tory-Reform swing voters, not really in the Labour electoral universe.” 

There are constituencies with high fossil fuel employment where there’s a wider coalition with those views. Scottish Labour is painfully aware of these, but it’s “a handful” of seats out of 57.

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By contrast, the same polls showed clearly that a large majority of the Labour 2024 coalition oppose new North Sea licences. And on the broader question of the clean energy transition, the wider public is also clearly on the government’s side. “The Government is pushing at an open door,” says Akehurst. “Its voters intuitively support them on this.”

He notes, however, that because most people don’t have strong views on this, their positions are malleable and the politics remains fluid. But DESNZ point out that even if opinion is soft, real-world preferences tell a different story. Since the war against Iran began, consumer demand for solar panels, heat pumps and electric vehicles has rocketted.

A Party source was bullish: “We are confident that we can win the argument against a sea of right wing misinformation. The British people have now lived through two fossil fuel shocks in half a decade and know clean power is the future. We will fight and win this debate.”

In that debate, the government has led with its ever strengthening retail offer. On Tuesday, two of the headline policies were more solar panels on social housing and more financial support for people currently heating their homes with oil and gas to switch to a heat pump. There’s also deregulation of planning, to speed up construction of the new grid that we need.\

The changes that got the wonks excited, however, were about how to tax and subsidise renewables. The Electricity Generator Levy on old wind and solar farms will go up, in an attempt to push those generators onto Contracts for Difference (CfDs). These pay renewable electricity generators a fixed price that is insulated from gas price spikes.

Those that take up the offer will keep their old subsidy while also getting the new CfD one, so the policy is arguably a bit generous to the industry. But the aim is the right one: reducing the impact of the gas price rollercoaster on the cost we pay for electricity. There’s growing agreement in the policy community that that’s a key way to cut bills and make it more attractive to switch from boilers to heat pumps – which, of course, is what voters might actually notice.

But these policies are getting lost in the SW1 noise. Tuesday’s announcements were almost entirely overshadowed by Olly Robbins fighting back against Number 10’s attacks on his Mandelson vetting decision. 

Any policy that makes bills lower than they’d otherwise be is valuable politically. But a more populist policy might have a bigger impact on the cost of living, and also get more attention.

And that’s what is missing here. Yes, Labour’s voter base agrees with it on the North Sea, but it’s not the thing that most of them care about. What they care about is the cost of living. Nationalising the grid and gas-fired power stations, for instance, would cut bills and annoy the right people. It would show voters whose side Labour is on. To create a big, noisy political debate on that issue, one the media can’t ignore and which unites the public around Labour, the government’s energy policy needs to take far bigger risks. 

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