Prime Minister Andy Burnham has promised a “pragmatic” approach to the North Sea as he used his first Labour conference speech as Prime Minister to set out a sweeping overhaul of Britain’s economy, energy system and public services.
Addressing delegates in Liverpool, Burnham pledged to break with the economic direction of the past 40 years, arguing that greater public control of energy, water and housing would help bring down costs and unlock economic growth.
Energy featured prominently in the speech, with the Prime Minister setting a new ambition to bring UK energy costs into line with European neighbours within a decade.
He said: “One of the biggest barriers to growth in the UK is the cost of energy. British businesses and billpayers pay some of the highest energy costs in Europe.
“Within 10 years, I want those costs to be in line with our neighbours.”
Burnham also confirmed plans for Great British Grid, a new publicly owned branch of Great British Energy which he said would compete with private operators, reduce costs and tackle lengthy grid connection times.
He said: “It will increase competition, drive down costs and speed up connections so businesses can expand and grow more quickly.”
However, Aberdeen & Grampian Chamber of Commerce questioned whether the £4 billion earmarked for the new body represented the best use of public money.
Russell Borthwick, chief executive of the Chamber, said: “At first reading, this looks like a very poor use of scarce public money. There is private capital ready to invest in Britain’s grid from companies already operating at scale here in Scotland. The real barriers have been a glacial pace in the planning system and a lack of timely decision-making.
“Government should focus on fixing those problems rather than spending £4 billion creating a state-backed competitor in a market where industry is already getting on with the job.
“The bigger concern is what gets squeezed out. Great British Energy has a finite budget, and diverting such a large share of it into grid infrastructure risks starving nascent sectors like floating offshore wind of the support they need to build UK supply chains, manufacturing capacity and long-term jobs.
“Public money should be used where it can genuinely unlock investment that would not otherwise happen – not to absorb risk in areas where private investors are already prepared to deliver. The opportunity in floating offshore wind is enormous, particularly for the North-east of Scotland, but the world is moving quickly and the industrial prize will not wait for Scotland to play catch up.”
Burnham said the government would also pursue a “massive expansion” of home-grown renewables and nuclear generation and accelerate work to break the link between electricity prices and international gas prices.
In a potentially significant intervention for the North-east economy, he added: “And we will be pragmatic in relation to the North Sea as we build a bridge to a clean energy future and face the climate crisis.”
Elsewhere, the Prime Minister announced plans for a National Care Service providing free care at the point of use, funded in part by changes to the state pension triple lock from April 2030.
The existing triple lock will remain unchanged for the rest of this Parliament, after which pensions will continue to rise by at least inflation or 2.5%, while being adjusted over time to maintain their value relative to average earnings.
Burnham also announced greater powers for councils over poor-quality private housing, plans to remove restrictions on public ownership of water companies and a new national commission on electoral reform.
On Brexit, he told delegates: “Brexit has done more harm than good.”
He said he would use a UK-EU summit later this year to begin setting out options for Britain’s long-term relationship with Europe.
The Prime Minister said the programme represented a deliberate break from recent economic orthodoxy, while insisting the government would continue to stick to its fiscal rules.
He said: “I will make a break with the direction of the past 40 years and put Britain on a new path.
“Build a new economy and a new politics. That is the case I make to you today.”