ALEX BRUMMER: Piling up the green billions

Britain has a full house at the COP 28 climate summit in Dubai: King Charles, PM Rishi Sunak and Labour leader Keir Starmer.

Each brings their own dimension to the table. The King is a green and a wildlife warrior who offers an ethical blueprint.

Sunak is treading a practical path balancing green ambition against energy security. Starmer regards hitting the net zero goal as a key to bolstering UK growth.

The Prime Minister’s approach may draw opprobrium from Just Stop Oil, Labour benches and preachy climate change analysts. In practical terms it is shared by much of the world.

President Joe Biden – who is absent – may be leading the way on green subsidies with the $369billion (£295billion) in the Inflation Reduction Act (IRA). But fracking for oil and gas in West Texas grows apace, improving energy self-sufficiency and export capacity. Long-term liquefied natural gas contracts signed by British Gas owner Centrica with US producers will help to keep us warm through Arctic days ahead.

A fair cop?: Britain has a full house at the climate summit in Dubai: King Charles, PM Rishi Sunak and Labour leader Keir Starmer

A fair cop?: Britain has a full house at the climate summit in Dubai: King Charles, PM Rishi Sunak and Labour leader Keir Starmer

At a breakfast with an Abu Dhabi-based oilman, with interests in Iraqi extraction, he pointed out that China may be the world’s largest builder of windfarms but is still opening a new coal power plant each day. Coking coal is needed to produce metal components for electric cars. In his albeit partisan view, oil and gas extracted more cleanly and with lower emissions will be needed along with nuclear energy to furnish the base load – back-up energy – between now and 2050 and beyond.

What is rarely recognised is how carbon zero targets have changed the Tories.

Post-Brexit, the UK was going to be a nation of low taxation and smaller government. The pandemic and Ukraine changed much of that. The Conservatives, including rightist leadership aspirant Kemi Badenoch, have shown willingness to put money into greener technologies if it boosts or maintains vital manufacturing.

Steel-making at Scunthorpe is scheduled to acquire up to £300m of assistance to switch from blast furnaces to electric arc. Port Talbot is set to get its own deal. Jaguar Land Rover has been offered £500m towards its giga-battery factory in Somerset.

The Economist magazine commissioned law firm Shearson & Sterling to look at the rebirth of state subsidies.

As part of the EU, such funding largely was prohibited, often at a cost to British industry. There was much teeth-gnashing when the £3billion contract for Thameslink trains went to Germany rather than British-based Bombardier. The Government felt unable to underpin the UK bid because of state subsidy rules.

In 2015 some 0.67 per cent of national output was devoted to state assistance. The new data shows it has climbed to 2.71 per cent of GDP. Britain may lack a Biden-style IRA but carbon-zero subsidies – decided on a case-by-case basis – are soaring.

As a prospective PM, Keir Starmer also has taken himself off to Dubai to cavort with the good and the great from the political world and business. He seeks to explain Labour’s ambition to turn Britain into a green energy superpower.

The original idea was a huge £28billion a year cheque book to maintain green technology. As the stretched state of the public finances became clearer, the target for this spend was delayed to midway through the next Parliament. In the latest iteration, the number reportedly has shrunk to £20billion. If Starmer is not careful, he may find that Sunak, who has just added £1.6billion to meeting climate change goals, is spending more than the Opposition says it will.

The honourable idea of zero carbon is a fallacy. The need of virgin steel for pylons and nuclear, rare metals for battery production, coking coal for metals and energy security means the transition is going to be far more complex than advocates proclaim. A two-track approach, recognising a lingering role for fossil fuels, is eminently sensible.

Wilko betrayal

No one should be fooled by the crocodile tears of Wilko heiress Lisa Wilkinson in the Commons this week.

She and her family walked off with £100m of dividends, leaving 12,500 employees without jobs. Even worse, the founding family abandoned the discarded workforce by leaving a £50m black hole in the pension funds. Wilkinson should be required to disgorge assets to close the gap. Retirement income for faithful colleagues should not be scythed to enter the Pensions Protection Fund. Shameful.

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