The United States is out of the blocks. The European Union is hurrying along the track. China is competing too. Here in dear old blighty, we are not even at the starting line. While others are dashing towards the horizon, the UK still hasn’t tied its laces.
The government appears to have barely noticed that there is a global race to dominate the green technologies of the future. In investment attracted, jobs created, income earned and lives bettered, the prizes for the winners will be huge. In prosperity foregone, the penalty for the laggards will be severe.
In the US, Joe Biden’s administration has embarked on a $2tn programme to transform America’s economy. A big chunk of that money is intended to incentivise investment in technologies ranging from battery production to green hydrogen. It is driven by five goals: to decarbonise the economy, create well-paid jobs, gain an American advantage in the markets of the future, foster supply chains that are less reliant on authoritarian states and establish energy security. Anxious that the Biden plan will lure vital industries and cutting-edge tech away from Europe to the US, the EU plans to relax its rules on state aid to allow a wave of tax credits for green investment and speed up the approval of clean energy projects. China is spending huge sums in pursuit of its ambitions to be the world leader in areas such as solar panel production. While this contest has disturbingly protectionist aspects, there is also a big positive. Better that the great powers compete with each other to save the planet than to burn it.
The UK, a medium-size player that has detached itself from its nearest economic bloc, cannot match the vast incentives and subsidies the behemoths are throwing into this race. So our best hope of having a stake in the industries of the future is to maximise what leverage we possess by being agile, creative and purposeful.
A swath of recent studies have all reached broadly similar and alarming conclusions. The UK’s response to this global pivot is worse than sluggish. When warp-speed thinking is required, the government is moving with the pace of an arthritic snail.
All the major global actors are putting substantial sums into securing supplies of semiconductors, the brains in everything from electric vehicles to wind turbines. Our government was supposed to unveil a UK plan for semiconductor security last autumn. Sign of it there is still none. The business select committee was right when it warned on Friday that the absence of any strategy in this vital area is “an act of national self-harm” that will leave the UK perilously exposed.
In the wake of Russia’s brutal invasion of Ukraine, and the rocketing gas and oil prices that followed, Boris Johnson launched what was supposed to be an energy security strategy. That was 10 months ago and was accompanied by the claim that the nuclear component would be accelerated by the immediate establishment of a “flagship body” called Great British Nuclear. This promise has gone the way of so many of that bloviator’s empty boasts. Simon Bowen, the industry expert who was appointed to advise on GBN’s creation, recently told MPs that it still doesn’t exist, ministers have not set out “a plan which tells us which technologies we need and when and where” and no funding has been agreed. “The piece that is missing at the moment is the overarching strategy.” Quite an important piece to be missing, wouldn’t you say?
Chris Skidmore, a former science minister, was made “net zero tsar” by Liz Truss. You should not hold that provenance against him, because he is a thoughtful man who recently produced a timely report. Its polite and technical language did not disguise its scathing conclusions. His comprehensive review, running to more than 300 pages and drawing on more than 50 roundtables across the country, recorded failure after failure. Investment in renewables has been stifled by government U-turns and prevarication, such as the endless scrapping among Tories about whether they want to encourage more onshore wind or to prohibit it. New homes are still being built with no regard to net zero standards. Old ones are leaking heat for lack of an effective insulation programme. Mr Skidmore added his voice to those warning that the transition to clean energy is a global race for potentially vast markets that the UK cannot afford to lose.
It doesn’t have to be like this. There is a large reservoir of public support for energetic action to green the economy and end our dangerous dependency on planet-destroying fossil fuels. Even when Britons have a lot of other stuff to make them anxious – a collapsing NHS, a cost of living crunch, waves of strikes in essential services – the climate crisis still commands a place in the top four of voters’ concerns. Britain has the talent to excel in some of the technologies that will be critical in the 21st century. The UK has been a pioneer in developing carbon capture and offshore wind, which accounted for about a quarter of our electricity generation in 2022. But there is a growing fear that the UK is squandering its advantages and not exploiting its opportunities. The consequences could be devastating for the economy. The British car industry, which supports a lot of jobs, is highly anxious that it will be a casualty of the end of the combustion engine without a supply of domestically produced batteries to put into electrical vehicles. Gigafactories are essential for the volume manufacturing of EVs. For all the rhetoric about being in the vanguard of the “green industrial revolution”, the UK only has one battery factory compared with an estimated 100 in China. The hope of establishing a second crumbled when Britishvolt, a venture near Blyth, Northumberland, collapsed into insolvency last month.
Some of the blame belongs with Brexit, which has made the UK a less appealing destination for investment. Culpability also lies with the incessant instability since the referendum. We need a long-term plan to invest in the R&D, skills and infrastructure necessary for a green economy, but that’s not going to happen when you have a succession of short-term prime ministers too consumed by scandals and scrabbling for their survival to think about the future. It is impossible for government to give confidence to business when Number 10 is a revolving door of chaos. Being a serious competitor in this race will require an industrial strategy, a concept to which many Tories are ideologically allergic. Rishi Sunak has had nothing of substance to say about the green transition since he became prime minister.
It is a huge handicap that the Conservative party is so divided within itself about net zero. Some Tories do understand the imperative. Others scoff at what David Cameron once derided as “green crap”. I still meet a few who think the climate crisis is a hoax concocted by a conspiracy involving Extinction Rebellion, Sir David Attenborough and Beijing. Many Tories can think of net zero only as a painful burden to be moaned about and never as a fabulous opportunity to be eagerly seized.
The way the polls are looking, it is more likely that the great challenge of moving to a net zero world will fall to a government led by Sir Keir Starmer. Labour is talking a much more positive game with its green prosperity plan. Features include the promise of zero-carbon electricity by 2030 and a programme to retrofit insulation to 19m homes. Some in Labour’s ranks fret that it is a bit too bold on the grounds that the Tories will attack the affordability of the price tag and on the assumption that greenery lacks appeal to voters in “red wall” seats. Ed Miliband, the shadow climate secretary and an evangelist for green growth, has had talks with Biden team members about how they conceived and promoted the US government’s transition programme. Labour has broadly borrowed from the way the US president sold it to his voters. Says one senior Labour figure: “It works when you make it a (energy) bills issue, a jobs issue, a security issue and a climate issue.” The green prosperity plan is the most audacious and future-facing element in Sir Keir’s otherwise rather cautious prospectus. The Labour leader has now made it so central to his pitch for revitalising Britain that he couldn’t back away even if he were minded to.
Which is good. The only future economy is a green economy. The coming decades will see one of the greatest industrial transformations in human history. The UK needs to be at the races, not fiddling with its laces while others speed away down the track leaving us for dust.
• Andrew Rawnsley is Chief Political Commentator of the Observer
• This article was amended on 5 February 2023. Britishvolt’s planned factory was to be near Blyth, Northumberland, not “in Teesside” as an earlier version said.
