Going for growth? There's every sign Starmer is going for broke - a slew of deeply controversial decisions either made already, or being readied, all in a rush. Someone's told him it'll be a compelling, critical-mass message for all those would-be investors in UK plc that he's really open for business and will trample down all nay-sayers into the building-site dust. (And presumably McSweeney has told him that 'all at once' is the best tactic.)
- Support for Heathrow third runway (already signaled explicitly)
- 'Nothing to stand in the way of new nukes' (yesterday)
- 'Likely to grant Rosebank etc oil/gas production licences' (yesterday)
- Extension of subsidies for Drax (Monday, by all accounts)
Everyone has their favourite 'hate' - mine is Drax; & I approve of Rosebank - and there is many a Green (and Red-Green) who hates them all with equal passion. Perhaps there is someone other than Reeves who loves them all? The construction industry, I guess, although they get nothing from the Drax announcement because Drax won't be committing to it's putative, ridiculous next-phase project "BECCS" in the near future - in fact, maybe never.
Wow. Has McSweeney decided there'll be a month of massive sound & fury, followed by the usual amnesia? Are the lefties who've just had the Whip restored so pathetically grateful, they'll take the required vow of silence? Will the construction unions come swinging in with big support?
And Miliband ..? Ah yes, we've mused about him several times. He's swallowed LHR3. He is in favour of nukes, and can probably swallow Drax (with much sophistry). But Rosebank? Lots of pundits are tipping him to quit over this, but I reckon otherwise: check his performance at the ESNZ Select Committee last month (linked to in an earlier post) - he very studiously repeated the exact wording of the Labour manifesto pledge: no new exploration licences. Rosebank et al don't need an exploration licence, just a production permit. I reckon he's swallowed it already, but we may soon find out. His substantial cred with the greeny-lefties is going to be stretched to breaking-point soon. What spectator sport this is!
Interestingly, only the nukes on that list above involve government money - and even that has (thus far) been limited to the ill-judged, probably ill-fated Sizewell C. Everything else will either be private money and/or subsidies levied on energy bills. So none of these 'announcements' is anything more than permissory. Performative policy, on the cheap. May never happen (aside from Drax grabbing the new subsidies with both hands, of course).
So: let's see if there's a lasting political cost. Maybe, maybe not.
ND
_________
Sorry, no links on this post - not easy from a 'phone. You'll need to google it all yourselves!
27 comments:
All good stuff. Problem...
We have shown ourselves, for some decades now, of a complete inability to manage ANY infrastructure project, whether IT or physical structures/transport. Deskilling and the disappearance of politicians with any gravitas, whatsoever.
Are we ****ed? Yup. God knows what state we'll be in when Starmer, Cooper, Rachel from Accounts and Bridget Philistine are done with us...
Ms. Birbalsing, she of Mchaela Academy, whose results compare with Eton, here gives Ms. Philistine a slapping, after a meeting with her.
https://dailysceptic.org/2025/02/06/birbalsingh-blasts-phillipson-you-dont-know-your-own-bill/
For 20 years or more we have done very little physical infrastructure and even less social infrastructure. The last Tory gov knew this and were too busy infighting and too scared of voters to do anything useful. Probably glad to pass over a poisoned chalice.
The chicken have come home to roost, no longer will a lick of magnolia paint and a haircut pay the bills. Starmer is more scared of the markets than he is of a few oiks.
Whether any of this will come to useful fruition is a puzzle. The lawyers will squabble and send in fees, bearded academics will pontificate but diggers pulling up Home Counties or even the Midlands turves - maybe.
I think we can't afford to bugger about with untried ideas that do not come with a project plan, a pert chart and a spreadsheet. Too many notions seem the airy fairy playthings of consultants and publicists. The worry is Starmer does not have enough down-to-earth types to sort the wheat from the chaff.
Already that white hot fad quantum computing seems to lose against brute force and ignorance, otherwise known as AI. BTW, why do those computers use so much water, do they actually pour hot water down the drain?
But 'twas ever thus, the King's court always attracted frauds, mountebanks and projectors. We look across the pond and wonder when will the s**t hit the fan because there they have frauds, mountebanks and projectors on steroids.
"Perhaps there is someone other than Reeves who loves them all? The construction industry, I guess"
So it'll be goodbye to those mythical 1.5 million "homes".
Jim,
£1 billion already spent on consultants, I gather, another FU to OAPs
"Too many notions seem the airy fairy playthings of consultants and publicists. The worry is Starmer does not have enough down-to-earth types to sort the wheat from the chaff."
Thats because politics has become the realm of 'If I say something it becomes reality . I don't have to DO anything to make it so, I can create any reality I want through the power of narrative alone'. Ergo RR can create growth by merely saying 'Let there be growth!'. Equally EM can create a 100% renewable powered grid by just willing one into being before a random date pulled out of his fundament.
These people don't need no stinking laws of physics or economics. They have the Power of The Will. It worked so well for the last adherent of the concept anyway.........
ND> only the nukes on that list above involve government money ... Everything else will either be private money and/or subsidies levied on energy bills.
ND, The nukes under the new Regulated Asset Base (RAB) funding model will be somewhat on our energy bills some 5 or so years ahead of the nukes producing any electricity, as they complete agreed stages of the build. Unless I misunderstand the RAB?
And in our current economic situation is any government keen to be re-elected going to authorise the nukes that will put voters leccy bills up ahead of time? Sort of ECO levy on steroids. (I suppose the sneaky fix might be to authorise some nukes build starts a year or two before an election, so the RAB levy won't apply until after the election.)
I suspect when the forecast price/MWh of the SMRs becomes apparent, the politicians will get cold feet about imposing RAB levy on voters. Apart from the voters being upset, expensive electricity will be truly bad for UK competitiveness. That will be a crunch time for the lobby!
Mr W My comment isn't to do with the RAB aspect, which is as you say. Sizewell has been granted a budget of more than £8bn of outright government cash up front, to "help it reach FID". I have rarely heard anything more ridiculous. EDF has rung rings round the civil service - again ...
Travelling to London by train, you see the new estates on the edge of every town, and the new devs of 5, 6, a dozen houses on the edge of each village. Then take Eurostar through N. France and none of the houses look later than maybe 1970s until you hit Paris and its apartements.
ND - isn't our thraldom to EDF the direct consequence of Anthony Charles Lynton Crosby Blair and his 1998 stop on all new nuclear build? CEGB at Gloucester had plenty of nuke engineers, but they've all retired ...
PS - what FID mean?
As is his wont, Paul Homewood sticks a big long sharp stick into Miliband's Offshore Wind wet dreams...
"Where Will Miliband Get His Offshore Wind Farms From?"
https://notalotofpeopleknowthat.wordpress.com/2025/02/07/where-will-miliband-get-his-offshore-wind-farms-from/
Trump's Make Israel Great In Land Area Again policy makes me wonder, as I think I speculated here before, if Trump 2 is going to be a Rishi/Boris type administration which will end up being hated by those who voted for it. Or is he securing his rear before advancing?
FID = final investment decision, anon
Starmer is struggling manfully (personfully?) to get our creaking economy going. But against some strong headwinds.
Trying to leave behind fossil fuels when we have no real terawatt replacement and the RoW is not making much effort seems noble but quixotic and poverty-making. Fossil fuels, however they came about, yield a vast energy store we cannot easily replace - if we can replace it at all.
Then finding new industries is a puzzle. Services are notoriously hard to make productive in tax revenue terms. Either because the earnings are small or the workers can and do avoid taxation.
The great new industries of our world seem to be pornography, fantasies, films, sending images to each other, getting in each other's way (see lawyering) or avoiding tax (see beancounting). Cosmetics, clothes and pharma are also big but involve the vulgar business of making things we don't want to dirty our hands or towns with.
Sadly we have not found the secret of making each chav child into a great script writer or scribbler of Harry Potter books. We still have the cold damp mouldy garrets of old but none of the hope or productivity.
Gone (for us) are the great days of steam, big electric power, big steelmaking, big construction. Other people do that stuff and somewhere else. Getting nuclear fusion to work seems just as likely to happen in China as the USA. It will be one of those, the gods of scientific research are generally on the side of the big battalions. Which leaves poor old Starmer and Rachel in a fix, along with most of Europe.
For what is common to the UK, France, Germany etc but is different to the US or China? Too much old - old people, old institutions, old buildings, too much preservative. Bring on social chaos, let the devil take the hindmost and let the weak and idle go to the wall.
"Bring on social chaos, let the devil take the hindmost and let the weak and idle go to the wall."
Sounds too much like what's happening already, to be honest.
Initial success will be low hanging fruit, but if DOGE continues as it has started, a large burden of taxation will be lifted from the USAsian people. That'll kickstart growth in their economy and leave the UK even further behind.
> Sizewell has been granted a budget of more than £8bn of outright government cash up front
That is a shocking amount before even agreeing the project, ~20% of its claimed costs. A completely crazy amount - though I think it was the previous administration that agreed to buy & clear the site well before the FID.
I see the Telegraph, which usually pushes pro-mucs articles, has written a pretty critical one by Industry Editor Matt Oliver - with "another British white elephant" in the title!
https://www.telegraph.co.uk/business/2025/02/09/sizewell-c-becoming-another-british-white-elephant/
Not a bad article, including the hint of wind-direction "Within Whitehall, there is nervousness that going ahead with Sizewell C will mean the Government has to put the entire cost of the project on its balance sheet".- I guess because of the RAB govt backstop for financiers if the entire project completely fails to finish/work.
Though annoying it fails to mention, like the entire British MSM, that the French themselves never intend to build another of these EPR reactors, it's just for the British now. The French have the easier to build EPR2 redesign for new nucs in France instead. Surely a MSM journo thinks that is newsworthy!
NB I see that the Hinkley Point C CfD RPI-inflated electricity price has increased to about £130.50 per MWh this year if HPC actually produced any electricity yet, using the BoE inflation calculator. A completely crazy prize, which I suspect Sizewell C will approach even with the RAB providing cheaper finance, given the huge cost overruns on HPC which surely makes it unprofitable for EDF despite its huge leccy cost. Wither UK industry with electricity prices like this.
See hat the true state of timber supply to Drax has now been made public!!! How will 'stab brother in back' whitewash this . Put his comments on stone maybe?
"Wither UK industry" indeed.
If we had any sense we'd never have stopped new nuclear build in 1998. How pleased the Guardian and the Greens were!
Instead we (Cameron) bet the house on a 4g design that hadn't actually gone through the formality of being built - and turned out to be at the bleeding rather than leading edge of technology.
Interesting - I went here to read the story
https://www.sustainability-beat.co.uk/2024/02/28/drax-timber-rare-forest/
and it told me some areas were no longer being kept up to date. Another USAid casualty?
" £130.50 per MWh this year if HPC actually produced any electricity yet, using the BoE inflation calculator. A completely crazy prize"
The Russian units in Turkey are due to provide power at 123.5 dollars per MWh ("According to energy analysts this price is high") - and the whole thing is being financed by Russia!
OT - measure and countermeasure - we've seen the anti-drone grids on vehicles for both sides in this war. Now Russia has got nets over afaik the entire Bakhmut/Chasov Yar road.
I assume the anti-net drone is next, after all the anti-drone net is already in existence ;-)
I see Drax has had its subsidies extended, albeit at substantially lower volumes at first glance.
Cannot help but feel the sting in the tail is down to the assumption it's only going to run "when needed" - that "when needed" is probably where boots get filled, and there's a considerable gap between what duration the government expects it to be, and what duration reality demands it to be.
Also OT - former Tory MP joins up in Ukraine:
https://euromaidanpress.com/2025/02/05/they-are-fighting-for-all-of-us-former-uk-mp-joins-ukraines-international-legion/
I'd like to see Boris, Rishi and Grant Shapps follow suit, for starters.
FT100 at new record. Never confuse "the economy" and "the markets".
>The Russian units in Turkey are due to provide power at 123.5 dollars per MWh .... the whole thing is being financed by Russia!
I hadn't realised the Russian nuc power in Turkey was priced that high, given the lower labour costs in both those countries - thanks anon. But looking into it seems that price (= £100.04/MWh at today exchange rate) only applies to 50% of the nucs power output for just 15 years, and does not seem inflation linked ("No Escalation costs"). Russia sells the other 50% on the spot market, and after 15 years all the power with 20% of any profit going to Turkey. Contrast with HPC which is RPI linked for 30 years for 100% of the power output, then EDF&CGNP sell 100% on spot market.
With interest rates now running at about 20% in Russia, this Build-Own-Operate (BOO) deal I guess doesn't look very clever for them anymore!
https://www.oecd-nea.org/ndd/workshops/wpne/presentations/docs/4_1_Cometto_Akkuyu.pdf
This prompted me to look at spot wholesale leccy prices in Europe last year for comparison. If we look at European wholesale spot price average over whole of 2024, and exclude the Norics with their super-cheap hydro, prices ranged from £49.98 to £94.74 per MWh (eg France £49.98, Spain £53.77, Germany £67.17, UK £74.98, Italy £92.92 all per MWh). That makes prospective HPC power look horrifically expensive for the UK :-(
Admittedly January 2025 spot prices are very much higher, eg UK £115.62 and even France £113.31, but should drop on average over the whole of 2025 (fingers crossed).
** My memory is poor these days: HPC CfD deal is for 35 years not 30 as I said above, and the HPC CfD leccy price is CPI inflation linked not RPI as I said above. Very luckily the BoE inflation calculator I used uses CPI not RPI. So fortunately the numbers above are correct - two mistakes canceling out :-)
Would this be a cheaper option as a bat tunnel on High Speed Rail.?
"Starmer is struggling manfully (personfully?) to get our creaking economy going. But against some strong headwinds."
Citations required. And kind words and hand waving don't count. Actual policies that are having real world effects on the other hand.........
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