Miliband’s net zero promises are false, Tony Blair’s think tank warns

Investing in green technology unlikely to reverse long-term decline of British industry

TIM WALLACE

Ed Miliband’s claim that net zero will create hundreds of thousands industrial jobs is vastly overstated, Sir Tony Blair’s think tank has warned.

The Tony Blair Institute for Global Change (TBI) said investing in green technology was unlikely to reverse the long-term decline of British industry and warned that ministers must not “over-state the job opportunities from green manufacturing”.

The think tank added that it was a “mistake” to let net zero dominate the Government’s entire economic strategy as it would deliver only a meagre boost to growth. It said: “It must be a pillar of the UK’s growth strategy, but it cannot be the whole strategy.”

The assessment comes after tensions emerged within the cabinet over the net zero agenda. Rachel Reeves, the Chancellor, said last month that carbon emissions had too often been used as an excuse “not to invest” in an apparent split with Mr Miliband.

Labour’s election manifesto promised a “Green Prosperity Plan” that “will create 650,000 jobs across the country by 2030”. Mr Miliband has also said that the Government’s net zero plan will involve “backing our proud manufacturing, coastal and oil and gas communities with good jobs, skills and private sector investment”.

However, the TBI report cast doubt on the plausibility of Labour’s targets. It said green manufacturing was likely to employ only 425,000 people by 2050 in a “best-case scenario” – a third less than than promised and decades later.

The think tank added that green manufacturing was more likely to employ just 350,000 people by the middle of the century. That is half the number who currently work in “grey” industries, such as oil and gas or carbon-intensive manufacturing.

“The Government must be careful not to over-state the job opportunities from green manufacturing,” the TBI’s report said.

“As manufacturing sectors have become more efficient over time, they have accounted for a shrinking share of the workforce. The green transition is unlikely to reverse this long-term trend in the UK.”

The Telegraph: continue reading

Tony Blair is Not the Solution to Ed Miliband

 

BEN PILE

Headlines this last week have reported an increasing tension between Secretary of State for Energy Security and Net Zero, Ed Miliband, and the former UK Prime Minister Tony Blair – both of the Labour Party fold, of course. The former PM’s eponymous Institute for Global Change has published a report that apparently argues for Miliband’s zeal to be cooled down. ‘Miliband’s Net Zero promises are false, Tony Blair’s think tank warns,‘ said the Telegraph on Thursday. The Sun followed with ‘Miliband’s ambitious pledge to deliver 650,000 green jobs to Britain slammed by Tony Blair‘. But, sadly, this tension doesn’t quite represent a dispute between anti- and pro-Net Zero forces that these headlines suggest. And as ever with Blairites, the remedy may well be worse than the disease.

Anyone reading the report in search of red meat is likely to be disappointed. It is a long tract that will only satisfy players of buzzword bingo – authored, as it is, by think tank wonks in favour of a long-term industrial strategy. Even to fans of industrial strategy as such, this is likely to be disappointing, for two principal reasons. First, there is no meaningful emphasis on industry, but empty promises that certain policies, also known as ‘picking winners’, can drive particular outcome. Second, whether the authors understand it as such or not, it is written wholly from the green perspective, which is categorically anti-industrial, and is consequently unable to identify the mistakes that have been made in recent decades.

To make these shortcomings plain, the report admits at the end of its first chapter that the authors “are grateful to the European Climate Foundation for its support towards the research presented in this report”. As I have explained in many articles here, the European Climate Foundation (ECF) is omnipresent in UK and EU climate and energy policymaking. It funnels tens, and sometimes hundreds of millions of euros each year from anonymous billionaires into all forms of organisations that intervene in these policy domains. It is unusual for there to be a report from any think tank that does not give such acknowledgement to the ECF. (See my article on the Social Market Foundation’s report just last month, for example.) Every UK climate and energy policy has been drafted by, funded by, lobbied for or campaigned for by the ECF or its parent founding organisation, the US-based ClimateWorks Foundation.

The report acknowledges input from two ECF staffers, four members of private economic consultancy firm Oxford Economics, and one from the Labour Climate and Environment Forum (LCEF). The LCEF is itself funded by the ECF, and the ECF-aligned Clean Air Fund – both being grantees of major ECF grantor the Children’s Investment Fund Foundation (CIFF), operated by hedge fund billionaire Christopher Hohn. (I explain the detail of these organisations’ relationships in my Climate Debate UK/Together Association report on clean air politics.)

This warren of rabbit holes is important context, because though the scope of the report seemingly reflects on decades of policy, it brings together the architects of policy failure without any admission of guilt, let alone reflection on that failure. After all, and as I have reported in earlier articles here, in Blair’s first term the Utilities Act 2000 effectively killed both coal and nuclear power in the UK by requiring energy retails to provide an increasing proportion of power from renewable sources. Though Blair’s term as Prime Minster ended in June 2007, by then the Climate Change Bill was in progress through Parliament, having failed to be fully read during the previous Parliamentary term, and being defeated only by the timing of the 2005 General Election. Moreover, the Climate Change Bill was, it was revealed by one of its principal authors Bryony Worthington, to have been drafted by organisations that were financially supported by the European Union and ECF’s grantors and the organisation’s predecessor. At that time, as I show in my presentation here, ECF’s founding organisation ClimateWorks had already drafted EU policy roadmaps out to 2050, including the abolition of coal. Is there any difference, therefore, between Governments past and present, the lobbying organisations that surround them, the think tanks that inform them, and the interests that fund them?

Such questions, which would surely shed light on the causes of policy failures, are not in the scope of the report, which prefers not to dwell on the past in proposing a new policy agenda of failure. One of those policy recommendations is that the government should “Take a More Integrated Approach to Regional Clusters That Cultivates Synergies Between Green Industries, Other High-Tech Sectors and Services”. That’s a buzzword-bingo full house, and it’s just one sentence. And this word-wank sheds much light on why the green agenda has failed.

If any normal but expert people were to sit down and write a report on how growth and jobs might be achieved, they would surely start with nuts and bolts of the economy rather than vainglorious jargon. But there is just one mention of high energy prices in the entire report, which observes that electricity prices “were 70% above the median EU price at the end of 2023”, making them “a key barrier to the viability of the UK steel sector”.

True enough, the green agenda has destroyed much of whatever remained of British steel industry. 2024 began with news of the loss of 2,800 jobs at the Tata steelworks at Port Talbot. Later that year, a further 3,000 jobs were set to be axed at British Steel (owned by Chinese Jingye Group, in fact) in Scunthorpe. But how separated from reality does one need to be to choose the steel industry as a metric of high energy prices’ effects on the economy? Since Blair’s first term, energy prices have tripled, and high prices are now a daily topic of the national conversation. They affect practically every business, each of which has to pass increased costs to their customers. Those customers, too, now have less disposable income, and so cut back on their spending.

The solution that a report produced by normal people, then, would address the problem of rising energy prices first and foremost. But the outer-space perspective that think tank wonks, high on hubris, take doesn’t think of things from the ground up. Their job is to foster synergies between sustainable technology growth hubs, or some such self-inflating hyperbole. And so the economy is understood in terms – categories – dictated by political priorities. Attention is paid, for example, to fintech, to AI and data centres, and of course to low carbon sectors, as if these industries exist in isolation, and as if the entire population could become data engineers.

I hate to use the word holism, for its obvious origins in green ideology. But the myopia that reports written on behalf of blobs is bound to cause the general to be ignored in favour of the particular. There is criticism, of a kind, in the exaggeration that has characterised green advocates’ claims about ‘green jobs’, but this is to little overall effect. “Currently there are around 700,000 people who work in the oil-and-gas, automotive, boiler-manufacturing and steel-manufacturing sectors and their wider supply chains, which could all be considered at risk from the green transition,” admits the report. This contrasts with just 56,786 jobs in “green manufacturing” and 147,396 jobs in “green service sectors” (greens are all talk and little action, after all). These 204,182 jobs could rise to 331,629 by 2050, claims the report.

The economic claims are even more eye-opening. The report finds that the “green economy” accounts for just 0.8% of GDP (“just over £20 billion”) in 2022, and that “By 2050, this figure could rise to 1.6% of GDP” (£65 billion). This is remarkable when it is remembered that on conservative estimates from the likes of NESO, reaching Net Zero by 2050 will cost in the order of £3 trillion, or £100 billion per year. Before the election, a spat between Miliband and Chancellor Rachel Reeves emerged over the issue of where Miliband’s plan to spend £28 billion a year on his “clean power by 2030” agenda. And these figures are even more remarkable when seen in the context of previous estimates of the green economy. The ONS’s low carbon and renewable energy economy estimates find that sector’s turnover to be around £69 billion for 2022 – not a vast amount more, relatively speaking, than the £47 billion the Government took by way of environmental taxes. But as I pointed out over at my Substack, most of this ‘growth’ occurred in sectors that are driven to grow by Government mandate, that sucks money away from other parts of the economy.

And here comes what appears to be the substance of the report’s criticism that has been picked up by the newspapers. This growth to “1.6% of GDP” is “barely enough to offset the decline in carbon-intensive ‘grey’ industries”, and so “Betting everything on green growth would therefore be a mistake”. But here comes the caveat that is being missed: “It must be a pillar of the UK’s growth strategy, but it cannot be the whole strategy.” The report believes that, with sufficient policy interventions, the green sector can be boosted to “5.8% of 2050 GDP (£235 billion)” and create 1.2 million jobs.

That is certainly far more modest than green claims in the past. In 2009, then PM Gordon Brown claimed that his policies would create an additional 400,000 green jobs by 2017, taking the total to 1.3 million by that date. Now, his predecessor’s think tank isn’t even claiming that much, for 32 years on. The green dream is surely deflating. “To succeed, the UK must cultivate multiple engines of growth and not skew its strategy too heavily towards ‘green’,” say the Blairites. But how?

“Relying on cheaper imported steel could lower input costs for industries like offshore wind,” is one option. Similarly, the report asks what is the sense of trying to compete with China for things like solar panels, when it can produce things so much more cheaply. The cognitive dissonance is spectacular: Net Zero, despite its failures and its limited potential, is conceived of as an “engine of growth”, yet also as a fetter on energy intensive industries making domestic manufacturing uncompetitive, requiring imports that allow emissions-reduction targets to be achieved, from countries that have no such commitment worth speaking of. The emissions are simply exported.

And it gets weirder. “Despite the complex security relationship,” says the report, “the UK should actively court investment from China’s world-leading EV manufacturers, as part of a broader effort to rebuild the UK’s position as a major auto producer.” In other words, since the last 25 years of policies that began under Blair have comprehensively failed to produce any benefit to domestic industries, Britain should beg China to make us an annexe of its industrial force. “For more than a decade, China has strategically oriented its economy around clean tech, achieving dominance in sectors such as solar energy and EVs,” it claims. But this is simply false. China has advanced in all industrial areas, and this is reflected in emissions data.

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