King’s Speech: Labour turns GB Energy on, promises nationalised railways
King Charles has set out the new government’s legislative programme for the next four years, including major reforms to transport, planning and energy.
One of the major electoral issues, energy security is high on the new Labour government’s agenda going into its first few months of power.
Having already suggested that a publicly-owned company could help drive clean power transition, improve supply chain issues, and bring bills down, it has now been confirmed that Great British Energy will be established. Legislation will also be introduced to ‘help unlock investment in energy infrastructure’. This will include the production of sustainable aviation fuel and investment in related infrastructure.
‘The announcement that the UK’s government intends to establish Great British Energy and invest billions of pounds in renewables is a major step in the right direction for the UK’s journey towards net zero. All organisations need to tackle their greenhouse gas emissions, and governments creating the conditions for them to access cleaner energy is a key part of the puzzle,’ said Rachel Delacour, CEO and founder of sustainability firm Sweep.
‘However, it is crucial that the government puts the appropriate structure in place around a project of this size,’ she continued. ‘This means monitoring it through stringent data collection processes, understanding the impact Great British Energy will have on the environment itself, and providing its users – especially businesses – with the detailed insights needed to reduce carbon emissions. It is only through taking such measures that Great British Energy can truly monitor its impact across the UK and support UK businesses to meet science-based climate targets.’
Others echoed some of these concerns, suggesting Labour’s ambitions for Britain to become a ‘green energy superpower’ were incongruous to current regulations on infrastructure planning, placement and development. Skill shortages were another red flag, with the UK Government needing to look at whole-of-system shortcomings when developing policy framework.
‘The scale of the ambition and the promise of state support, scaled down as it may be, will be extremely attractive to investors, who will feel they have a strong degree of certainty about backing UK projects,’ said Jonathan Croley, Partner, Energy & Resources, Ashfords LLP. ‘Yet the 2030 clean energy grid target will be an immense challenge. It is an extremely short time line to line up investment and get schemes up and running. Rush is also never a good thing, if it creates bottlenecks, competition for a limited supply chain and price rises as a result.
‘Currently setting up a new solar farm requires a good deal of regulatory compliance across different regulators too, and the more this process can be streamlined, the easier it will be for investment to be deployed,’ he continued. ‘GB Energy and its promise to work with the private sector to unlock growth and investment has been one of the most eye-catching energy pledges, but the industry response has been muted. At best it could offer a useful partner for risky schemes, at worst it could be unnecessary competition.’
Elsewhere, the confirmation that sustainable aviation fuel [SAF] will be a focus of Britain’s green industrial growth is another positive given the country is already leading in this area and the country continues to be heavily reliant on air travel. Meanwhile, water regulators such as the Environment Agency, Office for Environmental Protection and industry body Ofwat will see their powers strengthened.
It’s not clear what this means for already strained budgets and resources, with Environment Journal reporting yesterday on a market-wide investigation, with every supplier in England and Wales now being scrutinised on performance, including waste and pollution events, while others are now facing criminal investigations into environmental damage and negligence.
Housing regulations will also be updated as the party promises to ‘Get Britain Building’. Increasing the speed of delivery of new ‘high quality housing and infrastructure’ is the main goal, although changes to make the process of planning, approval and construction quicker is likey to raise some eyebrows given the potential repercussions on health, safety and environmental protections this could inadvertently lead to.
In contrast, a new National Wealth Fund has been broadly welcomed thanks to the opportunities this will create within net zero and decarbonisation, accelerating transition in priority areas already on route to become major centres of industries including clean energy. International investment will also be expedited through this, helping address some of the issues in accessing funds for low and zero carbon infrastructure projects.
‘Setting out the National Wealth Fund as a key priority demonstrates the Government’s determination to reshape the way we approach public, private risk-sharing, providing private investors with the confidence needed to invest in technologies and infrastructure that will drive growth and create jobs,’ said Dr Rhian-Mari Thomas, CEO of the Green Finance Institute and Chair of the National Wealth Fund Taskforce.
‘Implementing the recommendations made by the Taskforce will drive investment into priority areas, accelerate the decarbonisation of our economy and position the UK for increased international investment,’ they continued. ‘Yet time is of the essence. We need the Government to maintain the momentum that has characterised the work of the Taskforce to date so that capital is deployed at pace.’
With local leaders often seen as best placed to develop new climate-aligned policies based on the specificity of their area, the idea of increasing devolved powers will also be welcomed by many. Metro mayors and combined authorities will see more autonomy, and a separate pledge has been made to allow councils to take control of their own bus services, following models in Greater Manchester and London.
The transport-related announcements didn’t end there, either. Rail franchising will undergo a significant reform, with the establishment of Great British Railways, effectively bringing operators into public ownership. This comes less than 24 hours after the boss of Avanti West Coast was summoned to talks with the new Secretary of State for Transport, Louise Haigh, to discuss the company’s ‘unacceptable’ performance. The firm had the third worst on-time record in the country as of March 2024, with one-in-15 trains cancelled on routes serving major cities such as Glasgow, Manchester, Liverpool, Birmingham, and London.
‘There’s a lot to feel genuinely hopeful about from today’s King’s Speech,’ said Jamie Peters, Climate Coordinator at Friends of the Earth. ‘The government is making it easier for people to choose greener travel options by committing to overhaul our trains and bus services, has signalled change when it comes to our outdated energy system, and says it will harness the clean jobs and global leadership opportunities of the transition to a zero carbon economy. All of this will help to get us back on track for meeting the UK’s climate goals, including the target to cut emissions by over two-thirds by 2030.
‘However, there are still areas we need to see the new government going much further and faster on – namely nature,’ they continued. ‘It’s great that it plans to take tougher action against polluting water companies, but the government must enshrine the right to a healthy environment in law so that communities blighted by pollution can enjoy cleaner, healthier local areas,’ they continued. ‘It’s encouraging progress compared to the backsliding of recent years, but if we’re to protect communities on the frontlines of climate and environmental harm and safeguard the planet for future generations, we need to see the scale of ambition that matches the huge challenge ahead.’
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Image: Jason Thompson