Sustt: What is the new Labour government promising?

Despite being in government for just under a month, it's been a busy few weeks for the incoming Labour administration. But what exactly are they promising? And how do their new policies and pledges relate to the world of ESG?

?? In-depth insight

UK energy

Labour launches GB Energy, announces partnership with the Crown Estate

?? Written by Nicola Watts : "The swift introduction of GB Energy demonstrates Labour’s commitment to lowering energy costs for consumers, providing energy security and decarbonising the UK, as promised in its election manifesto. While the initial focus is on offshore wind, it will be interesting to watch where it will turn its attention next. I believe in the short-term this will be onshore windfarms as a de facto ban on these developments was overturned with immediate effect just days after Labour took power. Additionally, while GB Energy won’t directly supply customers to begin with, I think this will change over time as there are arguments in favour of adding a retail arm to the organisation."

What's happening? The Labour government’s publicly owned clean power company, Great British Energy (GB Energy), is to partner with the Crown Estate to accelerate offshore wind farm development. The Crown Estate, which controls most of Britain’s seabed, estimates that the partnership will get windfarm projects generating 20-30 GW of offshore power to the lease stage by 2030, enough to power around 20 million homes. The government has allocated ￡8.3bn ($10.7bn) of public money over the next five years to hasten the transition to clean energy, reducing reliance on energy imports from other countries and eventually bringing down household bills. The partnership could also attract up to ￡60bn in private investment. (City A.M.)?

Why does this matter? The creation of GB Energy, officially launched and introduced to parliament on 25 July, was a key part of Labour’s election manifesto and is central to the government’s plan to deliver 100% clean power by 2030 and reach net zero by 2050. Its initial focus will be on offshore wind, but it will also look to invest in cutting-edge technologies such as tidal power, small nuclear reactors, and carbon capture. Additionally, the Crown Estate, which manages the Monarch’s ￡16bn portfolio of land and seabed, will be given new borrowing powers to enable it to invest more in wind projects. Last year, it made ￡1.1bn in profit, primarily from leasing land to offshore wind providers.??

Company aims – Based in Scotland, GB Energy intends to lead energy projects through the development stages to hasten the process before handing them back to private ownership while retaining a stake. It may also become an operator of such projects in future. It will also support local energy generation projects by partnering with and funding local and combined authorities and community energy groups. Additionally, it will seek to build supply chains across the UK and look to work with Great British Nuclear. In addition to bolstering energy security and cutting bills, GB Energy intends to create 650,000 new jobs.??

Consumer benefits – Although GB Energy will not directly supply customers, a report by Nesta and Baringa suggests that the company could cut consumer costs by ￡35bn by 2050. It could also reduce the ￡350-500bn needed to decarbonise the UK’s energy sector and save up to ￡1bn in costs associated with failed offshore wind projects...

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?? Chart of the week - Labour's ambitious home building targets

???? Planning overhaul – Deputy Prime Minister Angela Rayner is set to announce an eight-week consultation to overhaul England's planning rules, aiming to deliver 1.5 million homes over the course of the Parliament, with a focus on social and affordable housing. Key proposals include restoring mandatory housing targets for councils (370,000 per year) and relaxing greenbelt building restrictions. The previous Conservative government's non-mandatory house building target was 300,000 annually by the mid 2020s but it never got close to this figure, as shown in the chart above. There are concerns that the number of new houses built this year could fall below 200,000. Rayner has also emphasised prioritising brownfield development while allowing some building on "grey-belt" sites in the greenbelt. (Financial Times)

Click here to read the article "Will Labour’s ‘grey belt’ plans boost housebuilding or turn out to be an ill-defined gimmick?" for an overview of the grey-belt issue.

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?? Bite-sized insights?

??? Record clean energy auction – Energy Secretary Ed Miliband has announced record funding for clean energy development, boosting the summer subsidy auction budget to ￡1.5bn, a 50% increase from the previously announced total. The move aims to revitalise the UK's clean energy industry after last year's failed auction and as senior renewable energy executives warn Labour's 2030 net-zero grid targets may already be unachievable. The budget includes ￡1.1bn for offshore wind projects, ￡185m for onshore wind and solar, and ￡270m for emerging technologies like floating offshore wind and tidal power. The announcement comes as official 2023 energy data shows renewables provided 46.4% of UK electricity, with wind power being the largest clean energy source. (The Guardian)

?? Environmental target audit – Environment, Food and Rural Affairs Secretary Steve Reed has ordered a rapid review of UK environmental targets and plans, to be completed by year-end. The review will assess if current goals in the Environment Act and Environmental Improvement Plan are sufficient to address environmental challenges. Civil servants, academics, and experts in nature, farming, resources, waste, and water will be involved in the review process. The incoming government aims to balance nature commitments with its ambitious infrastructure development. (edie)

??? Junior doctor pay deal? – Ahead of a potential winter care crisis, Labour has offered junior doctors a new 22.3% pay deal over two years, potentially ending a long-running dispute. The British Medical Association (BMA) recommends members vote for the deal, though it doesn't fully restore lost pay. Health Secretary Wes Streeting described the offer as fair to doctors, patients, and the NHS. If accepted, starting salaries for foundation doctors would rise to ￡36,600. (The Independent)