Energy’s Role in a One Nation Industrial Policy

The decline of traditional heavy industries and the growth of our financial and service sectors have left a lasting legacy on our national economy. In short, too much UK wealth is created and consumed in London and the South East. Figures published by the Office of National Statistics demonstrate the scale of the problem (1).

It isn’t just that there are more jobs in the South East: it’s that the jobs that exist are (in general) better paid, better skilled and more secure. The quality of life in the South East is distorted by the much higher cost of living and this causes its own kind of suffering, but opportunities are everywhere.

When people lose their jobs, there are always other jobs they can apply for – even if unsuccessfully. The same is not always the case in many parts of the north and regions. Of course, people can relocate to find work – as Iain Duncan Smith has indicated – but it is odd that a political party that purports to support the “Big Society” and so-called “family values” would want to encourage it.

The Coalition Government’s policy to abolish the Regional Development Agencies – the one superstructure specifically aimed at bringing prosperity to the regions – will only aggravate the problem.

The Labour Party needs to respond by developing a “One Nation” industrial policy that will redistribute wealth creation activity across the UK. It is important to state at the outset what a “One Nation” industrial policy isn’t – or shouldn’t be. It isn’t about bringing prosperity to the North at the expense of the South. Quite the opposite. The current set-up no more benefits Londoners who cannot afford a home of their own than Northerners who struggle to find well-paid jobs. A “One Nation” industrial policy ought to be a win-win strategy for the whole nation, bringing prosperity – and quality of life – to every corner of the country.

The industry that must be at the forefront of creating new “One Nation” wealth is the Energy Industry.

Firstly, by its nature, it is an industry that finds itself on the fringes – whether it be offshore wind farms or nuclear power stations that benefit from a coastal location. Economies such as West Cumbria and Anglesey depend for their existence on their local nuclear facilities. This is why there is so much public support for nuclear new build in those communities.

Secondly, the jobs are high skilled – and well paid. Engineers, scientists, process workers, health and safety inspectors, quantity surveyors, security personnel, civil nuclear police, occupational health, clerical, finance, human resources. This is an important issue: when a £90 million holiday village was planned in the coastal (and former mining) West Cumbrian village of Lowca, the community was divided.

I was living in a neighbouring village at the time and while some people welcomed the potential boost to the local economy, others were wary of the fact that most of the jobs would be minimum wage, part-time, seasonal and insecure. This wasn’t what they wanted for their local economy – and illustrates why many West Cumbrians welcome the nuclear industry and are genuinely terrified of the area morphing into a holiday destination and retirement community – much to the chagrin of the second home owners living in the Lake District.

Thirdly, investing in cutting-edge Energy R&D will have a spin-off to other high tech industries. Nuclear, tidal, geothermal and carbon carbon capture are all at the frontiers of scientific discovery and employ some of the finest minds in the world.  Previous spin-offs from nuclear research and development have included medical isotopes, flight simulators, food irradiation, vibration technology, and cooling systems.

Fourthly, the Energy industry has a lengthy supply chain so has a huge potential to create opportunities across the local economy. This was brought home to me when I attended a presentation about the Sellafield nuclear new build proposals and I got talking to a haulier who was hoping to win a contract to transport parts to the new site. A nuclear new build site needs raw materials, manufactured materials, transport, construction, security, telecommunications, IT, hospitality. The list is endless – and while some will need to be imported from abroad, a great deal could be sourced locally – and an obligation to do so could be written into Management & Operations contracts or even into Statute(2).

Bringing prosperity to an area also has a positive impact on local public services. Schools that were once undersubscribed and perhaps at risk of closure would become filled with the children of those taking on local jobs. Relocations from London and the South East may perhaps ease the burden on their oversubscribed schools. The same is true of local hospitals and other local services – indeed, the business case for a new West Cumberland Hospital was built on the presupposition that Britain’s Energy Coast Masterplan (including three proposed nuclear power stations) could bring an additional 14,000 jobs to the area.

Concentrating our Energy facilities on the fringes – where the jobs are welcomed – might reduce the need to build wind farms in the “Tory Shires” where people will go to the barricades to protect their rural idyll.

Fifthly – and most importantly, there is a desperate need for more energy facilities to secure our energy supply, tackle fuel poverty and help us meet our Climate Change objectives. I have spoken about this before, particularly with respect to the difficulties of tackling all three challenges simultaneously. However you resolve this, delivering on our Energy policy objectives remains an urgent priority.

The Planning Act 2008 was designed to prevent a repeat of the delays associated with Sizewell B which was 3 years in consultation and took six years from planning application to consent. It remains to be seen whether the Coalition Government’s policy of bringing the final decision on major infrastructure projects back to parliament will slow the process down and put these projects at the mercy of special interest groups’ lobbying of individual MPs. What needs to be understood is that any such delays threaten not just our Energy policy objectives but also the prosperity of the communities that could benefit from these new industries.

A future Labour Government shouldn’t be afraid of investing public money in the Energy industry. This is an investment that ought to see both public and private benefits. It should be seen as an investment in both our energy policy – and our economic strategy; about reordering and reshaping our economy so that everyone – wherever they live – can enjoy prosperity and quality of life.

References:

1. http://www.neweconomics.org/blog/entry/Breaking-free-of-London-focused-growth?utm_source=twitter&utm_medium=social&utm_campaign=20130523Breaking-free-of-London-focused-growth

2. Jamie Reed MP, Debate on Bill tp promote utilisation of local business supply chains.
http://www.theyworkforyou.com/debates/?id=2009-06-23b.692.0&s=%28%22local+employment%22%29+speaker%3A11511#g692.2

- See more at: http://www.lfig.org/articles/energys-role-in-a-one-nation-industrial-policy/#sthash.oCKdoACg.dpuf