Rival energy policies unclear as UK election looms

The UK has dissolved its parliament as the country prepares for a general election on 4 July. Opposition party Labour has held a substantial lead in polls in recent months over the incumbent Conservatives, but voters are awaiting firm details on many policies — including energy.

Confirmation of a summer election by prime minister Rishi Sunak surprised some, but his statement coincided with official data showing that UK inflation has fallen to its lowest in nearly three years.

Parties have yet to release detailed manifestos, although Labour is broadly more supportive of net zero policy. The party, led by Keir Starmer, performed well in local elections in early May. It won nearly 200 seats on local councils, as well as several regional mayoral contests, while the Conservatives lost almost 500 council seats. Notably, Labour's Sadiq Khan — who firmly backs environmental measures — increased his support to win a third term as London mayor.

Immigration, fiscal policy and healthcare will be the major campaigning issues for all parties, but climate policy is also key. Sunak has rolled back some decarbonisation policies, including pushing back the date to end sales of new internal combustion engine (ICE) cars, while he encouraged more domestic oil and gas production. And Conservatives seized on discontent with the capital's ultra-low emission zone transport policy — planned, ironically, by Conservative then-mayor and later prime minister Boris Johnson — to win a by-election in the London suburbs last year.

But legislation to mandate an annual North Sea oil and gas licensing round was not adopted before parliament dissolved. The bill was not among those selected for the "washing-up" process of expediting bills through to become law in the remaining parliamentary time, and outstanding bills cannot be carried over to the next parliament. Labour opposed the bill during its passage through parliament, and said last year that it intends to halt new oil and gas exploration in UK waters.

Policy in progress

The two main parties have surprisingly similar energy policies, although the Conservatives' largely dates from Johnson's premiership. They both back a windfall tax on oil and gas producers, implemented amid surging oil and gas prices in 2022 and extended this year to 2029, and both support nuclear. They also support green hydrogen, offshore wind and solar — although Labour's targets are slightly more ambitious, and want 35GW of onshore wind by 2030.

Labour, like the Conservatives, is eyeing private-sector investment to help fund the energy transition — some channelled through its plan for a publicly owned clean energy company, Great British Energy. The main difference so far is Labour's plan for a zero-carbon power grid by 2030. The Conservatives have set a 2035 target for this goal, which is in line with its commitments as part of the G7 group.

The next government will inherit economic challenges, with slow growth forecast, and lingering inflation. Labour in February backed down on its pledge to spend £28bn/yr ($35.6bn/yr) on the energy transition, if it wins power.

And the UK has challenging, and legally binding, climate targets to hit. It must cut emissions by 68pc by 2030 and 78pc by 2035, from 1990 levels. The government has hit goals so far, mostly owing to the closure of coal-fired power plants. But the independent Climate Change Committee has warned that action to meet targets from 2030 onwards is "worryingly slow".

The prospect of change could prove key for voters. The Conservatives have been in power since 2010, and have fielded five prime ministers during that time — the last two of which were not chosen by the electorate.

By Georgia Gratton

UK offshore energy expenditure

UK energy production and consumption