Ewan Cameron: The UK could have a competitive advantage if it weren’t for Miliband’s madness

Growth is a lower priority than stamping out LNG from our energy mix, for this Government.

The essence of political office is to decide. After ten months of Labour, we have a growing list of decisions this Government has made that are not in the national interest.

I don’t just mean the apparent mistake of taking away the Winter Fuel Allowance from 8 in 10 pensioners living below or just above the poverty line, and the £25 billion tax on jobs, and taxing farming families, the eye-watering £22 billion splurge on the public sector pay dispute, and capping our defence spending at 2.5 per cent. All bad decisions that voters want to overturn.

As Conservatives, we must have a powerful narrative to be relevant in this increasingly crowded political landscape. This narrative clearly articulates what a Conservative Government would do differently from Labour and the other parties when we win the responsibility to govern again.

The Great British public isn’t naive; people feel the uncertainty caused by an invading President Putin. They know US trade tariffs will impact our economy.  People feel exposed to China’s increasing influence on British society. Communities still feel anxious due to the continued anti-Israel protests. And now UK retailers are being attacked for ransoms – the British people want to know that a Conservative government would better serve the UK’s national interests.

As Clinton’s 1992 election team understood, it’s the economy, stupid. To give the British people hope, hope that the Conservatives will support UK business to compete, hope that the Conservatives will slay the cost-of-living monster, hope that we will empower and enable people to fulfil their aspirations. The confidence that we Conservatives will truly defend Britain’s interests, our work must start with a strong and growing economy. Fortunately, Rachel from accounts does not know the decisions necessary to deliver UK growth, which makes our task a little easier.

We don’t need to wait until just before the next GE, in fear of our opponents stealing our ideas, this Labour Government doesn’t have the intellect to pivot. Last week’s Local Elections were sufficient confirmation that the British people are desperate for an alternative future. We can begin to articulate how a Conservative team would decide to boost the UK.  Make it clear that we Conservatives have a Plan to boost free enterprise. Allow the voters to know that the Conservatives will boost consumer spending. Make it clear that, even though the Government is floundering, the Conservatives have a Plan to boost jobs.  We will stand up for those industries where the UK excels, such as agricultural science, life sciences, artificial intelligence, finance, advanced manufacturing, creative industries, retailing, hospitality, professional services, etc.  We must reassure the country that we Tories have the Plan to boost economic growth.

The Government could have reduced electricity costs in every home if it had decided to do so. The Labour Party could have decided to reduce the cost of living, but chose not to. Ed Miliband and Ministers hide behind the wholesale energy price to avoid accountability for these decisions. Miliband portrays wholesale energy prices as the sole villain, which is fake news. Miliband’s decisions since he became Secretary of State for Energy & Climate Change have caused the average household to continue to pay a staggering £955 of their annual income on electricity. Miliband claims our astronomical electricity bills are because of the international wholesale price; his argument isn’t even logical: if the UK’s electricity costs were truly dependent on the global wholesale prices, then why has electricity in the UK become more expensive than nearly all other countries? Fake news!

The facts are that wholesale prices only account for approximately 36 per cent of our electricity bills. What the Government doesn’t wish to admit is that it decided not to reduce the other costs that make up our bills, allowing all these costs to escalate massively.

34 per cent of our electricity costs can be attributable to Wholesale Energy prices in 2019. This is evidence that the whole basket of costs, which make up our electricity bills, has been allowed to ratchet upwards since Russia invaded Ukraine.

Subsidies to suppliers have surged to five times their 2019 levels; this includes £11 billion in renewable subsidies, £4.6 billion in carbon taxes through the Emissions Trading Scheme, £2.5 billion in grid balancing costs, and £1 billion in capacity market costs – all funded by UK households and UK businesses.  It is crucial to understand that as the UK shifts more of its energy mix toward renewables, costs rise; for instance, the £2.6 billion Grid Balancing Cost, which ensures electricity supply meets demand, increases as more renewables are connected to the grid; due to renewables being more volatile than traditional power sources. Recent outages in Portugal and Spain underscore the critical importance of this balancing mechanism.

Kemi Badenoch is right to break from the establishment, calling it “impossible to achieve Net Zero by 2050 without causing a serious drop in living standards”. By ending the establishment view that switching to low carbon, whatever the cost, is OK because the establishment regards it as the UK’s role to lead the global revolution to Net Zero, allows us Conservatives instead to put ourselves on the side of hardworking people up and down the country. Labour making the decarbonisation of the grid by 2030 a target, sacrificing all alternative power sources to maximise renewables, is a decision that the Government must be held accountable for. If the Governing party is not transparent about the real costs of the switch to net zero, then His Majesty’s Opposition must hold them responsible.

Electricity price differentials between the UK and the world’s largest economies pose an existential threat. The UK is unique in its reliance on just-in-time energy supply and has minimal underground storage capacity.  Importers, shippers, and suppliers have no supply or stockholding obligations, and the UK has no publicly funded strategic gas reserves.

The UK has much less gas storage capacity than other European countries – about 3.2 billion cubic meters (bcm), seven times less than Germany and five times less than the Netherlands, which has a quarter of the UK’s population. LNG has grown to 28 per cent of the global energy mix, almost doubling its capacity between 2010 and 2023.  Since Putin disrupted the global gas market, LNG has begun its fastest increase ever, culminating in a forecasted 40 per cent increase by 2028.  Why does the Secretary of State think he is correct and everyone else is wrong?  Ironically, the UK would have a competitive advantage if only it invested in LNG storage while other countries invested in LNG production.

Today, Britain’s storage facilities only hold sufficient gas for 12 average days or just over a week during winter, while Germany has a capacity for 89 days. Centrica plc, parent of British Gas, has offered to invest £2 billion in Liquified Natural Gas and Hydrogen storage, increasing the nation’s gas storage by 50 per cent if the Government shares some of the commercial risks. Suppose the opportunity to expand the Rough gas storage site (safely located below the North Sea) to enable the UK to buy LNG at the lowest price wasn’t sufficient motivation for Miliband. The fact that the Rough Field would become a reliable store for green Hydrogen should make Miliband reconsider his decisions. Unfortunately for Britain, this Labour Government has chosen to keep electricity costs elevated rather than allow any investment in LNG.

As an alternative Government, it can be us Conservatives who have the vision and then the Plan to harness the creation of a reliable UK hydrogen source to transform our industries, such as British Steel at Scunthorpe.  Sweden, like the UK, produces less than 5 per cent of the world’s steel. Still, unlike the UK, Sweden’s steel companies are profitable and have a global reputation for producing exceptionally high-quality, high-purity, consistent, and advanced steel products – if you want it to last and you want to trust the engineering to keep you safe, buy Swedish.  Sound familiar? As we did in the 1990s, the Conservatives can apply their commercial experience to enable international collaboration to convert Scunthorpe into the world’s second hydrogen-powered steel plant.  The Swedish steel mill in Boden is forecasted to produce 5 million tonnes of green steel annually, more than the UK produces across all its plants in 2024.

Governments that reduce electricity costs for their businesses produce a massive boost to their economy. Electricity is approximately 3 per cent of a non-manufacturing enterprise’s operating costs; more complicated operating companies may spend up to 8 per cent of their revenues on power, and heavy manufacturing could be more than 10 per cent. When investors compare the UK’s utility costs to those of others, the UK’s current energy policy is judged to impair returns.

Centrica, a major British company, is understood to have walked away from a £2 billion investment due to the Government’s energy decisions.

Nissan’s VP for Manufacturing, Alan Johnson, has advised MPs that Nissan’s Sunderland factory “pays more for electricity than any other Nissan plant in the world.”

Equinix has increasingly looked beyond the UK for IT and data centre investments. The global data centre operator has expanded its footprint in markets like Germany and Sweden, where it considers energy prices more favourable.

In the automotive sector, government energy decisions have impacted the investment decisions of large, energy-intensive manufacturers. A leading multinational automotive manufacturer has chosen to locate its upcoming production facility in Germany instead of the UK.

AstraZeneca’s withdrawal of £450m in investment into a vaccine manufacturing plant in Speke, Merseyside, may also have been influenced by the Government’s energy decisions.

Countries like China and India attend global platforms such as the COP, IEA Net Zero Summit, and the World Conference on Climate Change and Global Warming, yet at home, they decide to expand their use of coal-fired power. Today, it is boom time in the Chinese and Indian coal industries. China broke its records in 2024, commencing construction on coal-fired power capacity totalling 94 gigawatts, and in India, they recorded their highest-ever level of upcoming coal projects, totalling 38.4 gigawatts. The facts are that globally, coal power capacity continues to rise year-on-year. Since Miliband has been in office, the world’s use of coal and gas to generate power has increased.

Miliband’s refusal to accept that the world isn’t following Britain, the Prime Minister’s tolerance of this crusade to stamp-out LNG from our energy mix before 2030, knowing his support for Miliband is sacrificing British jobs, forcing households to endure the never-ending cost-of-living crisis, and stopping the UK from growing, is reprehensible. Those who consciously chose not to vote for the governing party last week may not know all the facts, yet deep down they suspect this Government is not serving in the national interest.

Our Party has a responsibility and a political opportunity to become relevant again. We must hold Labour accountable for the decision not to end the cost-of-living crisis, a decision backed by the Liberal Democrats, the Greens, Plaid Cymru and the SNP.

Let me conclude by joining the drip, drip of reality by granting the last words to Ed Miliband’s career-long nemesis, Sir. Tony Blair, who labelled his climate crusade “unrealistic and therefore unworkable.”