New UK government to bolster climate goals

Despite some clear shifts in energy policy, Labour's manifesto does not suggest radical change in the near term, write Georgia Gratton and James Keates

The UK's new government wants the country to revive its climate leadership role, and is set to toughen investment conditions for North Sea oil and gas.

The UK's centre-left Labour Party has swept to power for the first time in 14 years after securing a landslide victory in the country's 4 July general election, consigning the ruling Conservative Party to the worst defeat in its history.

Keir Starmer has replaced Rishi Sunak to become the UK's fourth prime minister in the space of just two years and Labour's first since Gordon Brown in 2007-10. Labour has so far won 412 of the 650 parliamentary seats, giving it the biggest majority in parliament since Tony Blair's Labour government in 1997.

The result indicates a clear shift to the centre-left in the UK's lower parliament, the House of Commons. The centre-left Liberal Democrats won 71 seats, up from just 11 in 2019. And the left-wing Green Party secured four seats — quadrupling the one it had held previously. But the UK's first-past-the-post political system masked the significant fracturing of support in favour of smaller parties outside the two main players. Labour won its huge majority on only around a third of all votes, at around 9.7mn, while the Conservatives achieved approximately 6.8mn votes. The Greens picked up just under 2mn votes, and the right-wing Reform UK party won some 4mn votes but just five seats.

"Change begins now," Starmer said after his party's emphatic victory was confirmed. But while there will be some clear shifts in policy, Labour's election manifesto does not suggest radical change in the near term.

The new government will maintain the UK's staunch support for Ukraine in its war with Russia and has pledged to stay outside the EU. It wants to reset the relationship with the EU by "tearing down unnecessary barriers to trade", but that may be ambitious given Starmer has promised "no return to the single market, the customs union or freedom of movement".

Labour is more focused on addressing climate change than Sunak's outgoing government, although some of the former's energy policies bear a striking resemblance to those of Boris Johnson's premiership in 2019-22. It has pledged a zero-carbon power grid by 2030 and has set ambitious targets to "double onshore wind, triple solar power and quadruple offshore wind by 2030".

Offshore pressures

Starmer plans to keep the oil and gas windfall tax introduced by the Conservatives in 2022, and has pledged to raise it to an effective rate of 78pc from 75pc. Labour has no plans to revoke existing North Sea oil and gas licences but intends not to issue any new ones — or new coal licences — and it aims to permanently ban fracking. "Such measures would not create the investment conditions the UK needsto deliver the homegrown energy transition," industry group Offshore Energies UK says. Renewable energy associations have welcomed the new government's plans.

Labour also says it will restore 2030 as the phase-out date for the sale of new gasoline and diesel-fuelled cars, after Sunak's government pushed it back to 2035. And it plans to set up a national wealth fund to support the country's energy transition, using public funding to pull in private investment. The party also intends to create a new publicly-owned company, Great British Energy, funded with £8.3bn ($10.6bn) over the next parliament, "to deliver clean power".

The UK's election result is placed in sharper focus as some European and fellow G7 countries signal a shift to the right. Many consider a pushback on some net zero policy since Johnson's departure has eroded the UK's role as a leader on climate action. But Labour has been clear that international climate leadership and multilateralism will be priorities as it tries to reposition the UK on the world stage.