Decarbonisation, growth, delivery? The Government’s recess report card
Last year, Labour swept into power sounding positive noises on transforming Britain into a green industrial powerhouse.
New ministers talked of decarbonising the UK economy while keeping our industries competitive; reforming the planning system to build more homes and boost economic growth; and ending the cycle of infrastructure projects being over-promised only to be delayed, descoped, and ultimately scrapped.
Many of their words echoed what industry had been calling for, such as the recommendations in the Mineral Products Association’s Priorities for the Next Government paper, published shortly before the election.
As the Government’s second summer recess in office draws to a close, and preparation gets underway for the next Autumn Budget, it’s a good time to check what progress ministers have made on MPA’s recommendations.
Strong start on decarbonisation
In terms of delivering a decarbonised UK industry, the Government can show progress on a number of points. Their commitment to delivering CCUS has been praiseworthy, with £22 billion pledged for the HyNet and East Coast clusters, National Wealth Fund investment in Peak Cluster, and progress towards the first net-zero cement works in the UK by the end of the decade. Ministers should look to build on this by ensuring Peak Cluster is delivered, and working to set out a path for CCUS at dispersed sites beyond the clusters.
Likewise, there is cause for optimism on work to deliver a UK CBAM, which if implemented correctly should help mitigate the risk of carbon leakage in many energy-intensive industries, such as cement. Focus must now shift to getting implementation right, such as default values for imports where no data is currently reported and demonstrating effective enforcement at the border. A further priority should be ensuring that the potential linkage of the UK and EU emissions trading schemes benefits British businesses in practice.
Need to show working
MPA called for decarbonised and competitive industry, and on the second of these, the jury remains firmly out. While the Government has made much of its commitment to drive up domestic energy generation (albeit not from fossil fuels), and the proposed uplift in the Network Charging Compensation Scheme from 60 per cent to 90 per cent is welcome, industrial energy prices remain stubbornly high, well above those faced by European competitors.
While NESO is making diligent progress on reforms to the grid connection queue, grid connection costs and delays remain high, and the Government’s main intervention thus far has been to shuffle energy generation projects towards the front of the pack, at the expense of industry sites seeking to electrify.
MPA, like many industries, also called last year for the new Government to reorient the planning system towards growth, and Rachel Reeves almost immediately picked up the baton with a consultation on reforms to the National Planning Policy Framework, aimed at what she called a new growth-focused approach to the planning system. In a particularly welcome move, she also lifted the de facto ban on new onshore wind.
Over a year on, and the Government has built on this with its flagship Planning and Infrastructure Bill, and a recruitment drive for 300 more planning officers. However, with the bulk of the planning reform package yet to take effect, it remains to be seen whether they will actually get Britain building and the economy growing. They certainly haven’t yet – latest figures showed concrete sales at a 62-year low.
The Government’s stated ambitions for infrastructure mirror MPA’s call for better delivery of infrastructure projects, which all too often have been announced with much fanfare, only to be chipped away at and eventually cancelled altogether, making it difficult for businesses in the infrastructure supply chain to plan ahead.It’s welcome, therefore, that ministers have established a trackable, digitised infrastructure pipeline. But we’re yet to see better delivery in practice.
Aside from simply sticking to its word and delivering the jam tomorrow which we have been promised, what can the Government do to improve its approach to infrastructure, which it hasn’t already? They should start by mandating resource and mineral supply audits as an early part of planning for all major projects, in order to help the supply chain to more accurately predict future demand and invest accordingly; and help reduce the carbon footprint of infrastructure projects by specifying low-carbon cements, concretes, and asphalts by default.
Missed opportunities
In some areas, the Government is simply not taking the action needed to help industry to decarbonise competitively, grow the economy, and get Britain building.
The Carbon Price Support mechanism remains firmly in place, despite its original goal of helping phase coal out of power generation being achieved – its current purpose is simply to jack up industrial energy prices even further, and it should be abolished. Like their predecessors, this Government is delaying a decision on the future of hydrogen, rather than proactively prioritising supply for industrial uses where electrification is not viable, such as firing lime kilns. Likewise, the Green Gas Support Scheme continues to incentivise the diversion of much-needed waste biomass away from industry and towards uses where electrification is more viable, such as domestic heating.
There’s been even less progress on mineral planning specifically than on planning in general. This is despite a stable supply of domestic minerals being essential to the Government’s oft-stated ambitions for housebuilding and infrastructure – the same ambitions which planning reform is intended to deliver. And in a departure from the Government’s rhetoric on infrastructure delivery, several significant road projects have been cancelled as part of the Government’s cost-saving measures.
Ministers should treat mineral planning reform aimed at reversing the decline in permitted aggregate reserves, a specific effort to increase councils’ access to specialist mineral planning expertise, and instituting a National Statement of Need for minerals and mineral products as natural next steps after the Planning and Infrastructure Bill is passed.
Report: mixed results, must do better
As we near the quarter mark of this parliamentary term, the Government’s report card on decarbonisation, growth, and delivery is a mixed bag. Genuine progress in some areas is intermingled with positive noises that have yet to translate into tangible change, and some low-hanging fruit which has gone untouched altogether. It’s time to go up a gear, and the Autumn Budget and next year’s King’s Speech will be golden opportunities to do so.
