Britain’s former ambassador to US backs Labour’s energy plan

Sir Kim Darroch, a fomer national security adviser, has backed Labour’s energy plans and accused the Tories of stoking a net zero “culture war”.

Sir Kim said the next government must build “a new clean and shock-proof foundation for our energy system”, particularly in light of the war in Ukraine.

The former British ambassador to the United States criticised the Conservatives for having stifled the growth of new energy industries, and said North Sea oil and gas reserves had made the UK “complacent”.

In an article for The Telegraph – read it in full below – Sir Kim wrote: “By retreating in full culture war mode from some of its climate change commitments, the Government has broken the strong national consensus that made Britain a global leader in energy transition.

“This makes Britain less attractive to investors and more dependent on international markets for our energy supplies. It stifles growth in the new energy industries of the future. The next prime minister must rebuild that national consensus.”

Labour has set out plans to set up Great British Energy, a publicly-owned energy company, to help achieve its ambition to reach clean power by 2030. The party has pledged not to issue any new oil and gas licences for the North Sea, in direct contrast to Rishi Sunak’s plans.

But Sir Kim, who worked as Lord Cameron’s adviser when he was prime minister, warned that ongoing North Sea exploration would not be a long-term solution.

He wrote: “The idea that we can insulate ourselves from external shocks with a licensing free-for-all in the North Sea is a fantasy. As long as we depend on oil and gas, we will remain at the mercy of autocrats whose whims and adventures destabilise the markets on which British households and businesses depend for reliable, affordable energy.”

The former ambassador said the nation’s energy transition must be “driven largely by private capital”, and praised Labour’s plans as a possible solution.

“A well-capitalised, publicly owned, national energy company such as the proposed Great British Energy can, with the right mandate, be a powerful enabler, anchoring that stability,” he added.

He also called for a solution to the UK’s “leaky buildings”, saying that “much of the gas we burn to heat them is wasted” and urging the next government to declare all buildings critical national infrastructure to pave the way for widespread efficiency upgrades.

Sir Kim, who served as ambassador to the US from 2016 to 2019, resigned after leaked diplomatic cables revealed he was highly critical of Donald Trump, the then US president.

His backing of Labour’s energy plans comes amid a row over how much they could cost. In a recording obtained by The Telegraph, Darren Jones, the shadow chief secretary to the Treasury, said decarbonising the economy would cost “hundreds of billions” of pounds.

He said the £28 billion per year originally allocated to Labour’s green investment plans, later revised down to £4.7 billion, was a “tiny amount”.

On Wednesday night, Rishi Sunak challenged Sir Keir Starmer, the Labour leader, about the revelation during a BBC debate, saying: “Just be straight with people – how many hundreds is it? Is it 200, is it 300, is it 400?”

Sir Keir appeared to argue that some of the money would be invested by the private sector rather than just the public sector.

The Government has broken a strong national consensus

Energy security has barely featured in the election debate. This doesn’t surprise when set against the headline issues – the cost of living crisis, deteriorating public services, immigration seemingly out of control, and accusations of unfunded spending promises and secret plans for tax rises, writes Sir Kim Darroch.

But it is fundamental – without energy, literally nothing works. And Putin’s war in Ukraine is a wake-up call. It demonstrates starkly how vulnerable we are to events beyond our shores; that our national security and our energy security are indivisible.

By retreating in full culture war mode from some of its climate change commitments, the Government has broken the strong national consensus that made Britain a global leader in energy transition.

This makes the nation less attractive to investors and more dependent on international markets for our energy supplies. It stifles growth in the new energy industries of the future. The next prime minister must rebuild that national consensus.

The North Sea made us complacent. Successive governments have failed to invest the proceeds of our offshore resources to lay the foundations for a truly secure energy future.

Most of the oil and gas extracted from the North Sea is traded into international markets. It does not enhance our domestic supplies and cannot make them cheaper.

The idea that we can insulate ourselves from external shocks with a licensing free-for-all in the North Sea is a fantasy. As long as we depend on oil and gas we will remain at the mercy of autocrats whose whims and adventures destabilise the markets on which British households and businesses depend for reliable, affordable energy.

We are, moreover, doubly vulnerable. Our buildings are the leakiest in Europe. Much of the gas we burn to heat them is wasted. This pushes bills up further for households, small and medium-sized enterprises – for whom energy bills can be critical – and for larger businesses. It raises running costs across our public estate, including the NHS. It is a brake on growth.

This vulnerability has consequences. Putin’s aggression drove inflation into double figures. It detonated a cost of living time bomb that still inflicts widespread misery and is shaping the election campaign. The political shadow of these events will take years to dispel.

To get off the hook – Putin’s hook – the next government must act urgently on two fronts. It must reduce our dependence on fossil fuels. But there is no point in producing clean energy only to waste it, so it must at the same time upgrade our leaky buildings.

Specifically, in today’s more dangerous world, our next government must protect our national security by building a new clean and shock-proof foundation for our energy system. It must unleash an investment surge in our power supply as we electrify transport and heating, while accelerating the switch from gas to clean electricity.

Wind, onshore and offshore, and solar power will be central to this. Some also see an expanded role for nuclear power, though there are legitimate doubts, particularly in relation to the impact on bills. Meanwhile, the new government should broaden our options by rewarding innovation in promising new technologies, including tidal power and floating wind.

It must also expand and upgrade our power grid to keep pace with the restructuring of supply. Without trampling over reasonable local concerns, it must remove the planning obstacles that have hitherto held this back. And it must press ahead with grid-scale and long duration storage of electricity, facilitate investment in interconnectors and close the widening gap with our competitors in battery manufacture.

The energy transition must be driven largely by private capital. But this will not flow unless investors have confidence in stable long-term public policy. A well-capitalised, publicly-owned, national energy company – such as the proposed Great British Energy – can, with the right mandate, be a powerful enabler to anchor that stability.

None of this will yield its full return unless the next government simultaneously gets to grips with the energy that leaks every day from our buildings.

The new government should declare all Britain’s buildings – not just homes – critical national infrastructure. This would open the gate for public money to leverage much larger flows of private capital to pay for the energy efficient buildings needed to underpin both national and economic security.

Driving bills and carbon emissions down together in this way would raise disposable incomes, lower the cost of living, promote the growth of the small and medium-sized enterprises at the base of the economy, and cut running costs for the NHS and other public services – the very definition of win-win.

Sir Kim Darroch is a former national security adviser and UK ambassador to Washington