Wolfe Power Club
The Wolfe Power Club Podcast is an exciting platform for exploring crucial topics in the energy sector! With a focus on investment trends, governmental policies, and the evolving landscape of energy consumption, it promises to provide valuable insights for both industry professionals and the general public.
Host Alex Wolfe's background as an Energy director and experience in opening the first HVO Truck Bunker in Britain undoubtedly brings a wealth of expertise to the discussions. By engaging with guests who possess diverse perspectives and opinions on energy-related issues, the podcast is likely to offer a well-rounded exploration of the sector's challenges and opportunities.
Every guest will answer the big 3 questions:
- Where are you investing in Energy Industry?
- What do you want from the Government?
- What do you want Energy Customers to do?
Wolfe Power Club
The Good, The Bad & The Ugly; Energy Review of Labour’s First Year in Government | S1EP52
In July 2024, Labour entered the UK Government with a promise: a fair, fast, and bold transition to net zero. One year on, what has Labour really achieved and has Keir Starmer’s Government stayed true to that promise? On this week’s episode our host Alex and our Director of Government Relations Max Austin review the good, the bad and the ugly of Labour’s energy work across the past year.
Key topics discussed in the episode include: carbon capture, Great British Energy, Heathrow blackout and North Sea.
Robert Gordon University Energy Transition Institute report footage (David Duguid – LinkedIn): https://www.linkedin.com/posts/david-duguid-46b52b29_northsea-oilandgas-grangemouth-activity-7336106647154552833-gvbF?utm_source=share&utm_medium=member_desktop&rcm=ACoAADEcbEUBYaJKwZPuOEuO1DqBqcfR-zwyXoY
Wolfe Power Club is proud to be partnering with the Spectator Magazine to co-host their Energy Summit 2025 on November 24th. If you want to become a potential partner and have the last word on energy debates in 2025, please contact us.
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- A focus on investment trends, governmental policies, and the evolving landscape of energy consumption, it promises to provide valuable insights for both industry professionals and the general public.
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energy was going to be at the forefront of the Starmer government's administration. I think the industry is probably just pleased to see the government delivering, committing on CCS in a way that maybe hasn't happened before.
Speaker 2:We don't know the outcome of Heathrow yet. My gut feels it's probably been years of neglect on infrastructure, years of cutting budgets for basic maintenance of grid systems.
Speaker 3:There is a slowdown in offshore wind deployment and a steep decline in offshore oil and gas activity as a direct result of Labour's ideological policies 400 job losses every two weeks. A steep decline in skilled roles.
Speaker 2:So at this stage, a quarter way through the, through the parliament, I would probably give them wolf power club listeners, as alice cooper would school's out for the summer, but the reality is we've had 12 months of the new Labour government, so today it's like parents evening, but for the energy industry we're going to look at the good, the bad and the ugly, max. So, max, as we contemplate things, you've just come back from Germany. Just tell us, listeners, why were you out there helping the government relations of the podcast, no less.
Speaker 1:I think Germany is going through so many of the same political problems that the UK is also going through, and sometimes it's helpful to realise that issues that we think are fundamentally domestic are actually being shared by other governments, and certainly when it comes to energy. You've got a new government eight weeks, nine weeks into its term who've made ambitious energy commitments to the German public on the reduction of energy bills. And the question is by the time of the next election, will they have delivered on them and if they don't, what are the political consequences for voters and for the future of that German government? Different set of contexts, but fundamentally the same problems that the new Labour government, one year in, will end up having to face.
Speaker 2:Well, as we now know, we're in over 70 countries, so we welcome our German listeners to learn from the year that we've had in the United Kingdom. Also, we'd like to say if you love your politics and you love your energy. I'm delighted to say once again that on Monday, the 24th November, the Wolf Power Club podcast, alongside Britain's oldest magazine, the Spectator, will be hosting the Energy Summit the last word in energy in 2025. More details will follow, but we'll also welcome our Spectator listeners to the podcast today, as well as all of our lovely listeners and guys. You did amazing. The Bosch podcast is heading towards 300,000 listeners and we hope that this review of the government goes insane. So I'm going to jump straight in. Max and we're a positive podcast. We love our government. So, max, what of the good and the bad and the ugly? Let's start with the good. What's been very positive in the first 12 months of Keir Starmer's government?
Speaker 1:So we always knew, I think, that energy was going to be at the forefront of the Starmer government's administration. It was one of the things that we knew about in advance of the general election and, objectively, it has been bold, it has been clear, and I think we've all been surprised about the speed with which they want to radically change the energy industry here in the UK. Now, there are always going to be positives to that, there're always going to be positives to that, they're always going to be negatives to that and there's going to be uh trouble along the way, and our job over the next uh period of time is to dissect what went right, what went wrong, what was politically savvy, what was politically stupid and what maybe the consequences are for year two of the starmer government and when max says things were clear and bold, I have to say point of order, max, and we'll get into this later on in the podcast because we have seen a bit of flip-flopping on pricing policy.
Speaker 2:we've also seen a bit of nervousness about role of government and what they do, and also we've seen absolute outrage on the north Sea, but we'll come to that later in the podcast. So let's look at the good stuff, and I have a feeling carbon capture got you excited, max.
Speaker 1:Well, I think and you'll know this, alex, in your time in industry you know government is very good at making all sorts of commitments. It's less good at delivering on them, and I think that the government's commitment to carbon capture storage particularly thinking around the North Sea Basin, which has huge capacity for carbon storage, potentially an export facility has been pretty clear and I think that's been a positive pro-business lesson that they've learned. But I think the industry is probably just pleased to see government delivering, committing on CCS in a way that maybe hasn't happened before. Not only is that a good business thing, giving investor confidence, it's also good in terms of the government's commitments to reduce emissions in terms of the government's commitments to reduce emissions.
Speaker 2:And I think where I'm quite excited is at a time where, let's be honest, there's a lot of poverty for nation states, various groups having budgets cut, you know, a commitment over north of 22 billion to flagship policy really shows they're backing their man, ed billaband. But there's also another good thing that I think that we have seen is that it was started by Rishi. There was a round of sort of slight challenges because there wasn't enough money in it. But wind what's happened to wind in the last 12 months?
Speaker 1:Well, wind and the contracted contracts for differences approach to getting investment in wind and de-risking that for investors was, I think, one of the big end of policy innovations of the Conservatives' time in administration and Labour has continued on with that policy. We don't see much enthusiasm maybe from the Conservative benches about that and I think there's sort of two points to this. One, as I said, it gives certainty to investors, but also it has, as we've seen recently, caused a bit of friction in Westminster between the government, which is sticking to the policy, and parties like Reform that are becoming quite critical. And what I think is really important to remember, why it gives confidence and certainty to investors is the contract is with a private company. It's a private contract. The government formed a company in order to make these contracts have certainty.
Speaker 1:So whilst a reformed government can vary the rules around the contracts for differences in the future, what is agreed in the next set of wind auctions is set in stone and you can't retrospectively edit a private law contract, as we all know, and I think that is good for investors.
Speaker 1:But just sort of go back on that reform point. The lesson I think already, which is coming out one year on, is there used to be a reasonably clear political consensus in Westminster over the direction of travel, and what we're seeing and I'm sure this will ramp up in year two, year three, year four in the run-up in the UK to the next election go back to the German example, I'm certain it will there as well. Energy policy is becoming a political football and I think our job is to dissect who's playing political games reform, claiming that they're just going to get rid of these wind auctions and contracts for differences. And you know the policy reality, which is you can change things in the future on wind licenses, the wind auctions, but you can't do it retrospectively, unilaterally, even if you're in government.
Speaker 2:And I mean as a great shout I'm going to use an awful pun for our listeners here it's been turbulent times in wind energy over the last two decades. I never forget. In the early 2000s I was working for Shell and there'd been this big plan of this project called London Array. That was basically the mouth of the Thames, right around the sort of south coast, to basically use wind to be a great power for the city of london and shell had just pulled the financial funding and I was a keynote speaker at a wind conference and I can say, it's fair to say, I had very few friends that day. Now, something that I would say has been early stages, but you've put it under the good area, max. And I'm gonna say to our listeners please comment on this because I think it's going to divide uh opinion. Great british energy. Why do you think it's been good max?
Speaker 1:because obviously it's been a key part of the 12 months, but I see you've put it under the good items great british Energy is itself controversial in its approach and we don't know whether a state-owned company is going to be able to deliver on its mission. However, it was something that was announced by the government, as I said, ahead of the general election. It has been founded. It is still in its infancy, so let's reserve judgment. But it goes back to my starting point, which is we were told in the energy space that things would happen quickly, and this is in an industry where often things are measured in years if not decades. Years if not decades. And within a year, great British Energy has become a functioning public enterprise. It is chaired by Jürgen Mayer from formerly of Siemens. Its chief executive is Dan McRae, who was the chief executive of Renewable UK, and its purpose so far is to demonstrate that the UK government is serious about reshaping the energy market and that it's prepared to put in public money to that debate. Whether or not that works as a philosophy, let's see.
Speaker 1:Note Conservatives very critical of this approach. The Conservative Environment Network, one of the major pressure groups in the Conservative Party, has certainly been since the start very sceptical of the GB energy approach. But I put it in the good because it was something they said they would deliver and they've got on and done it and I said it's now working. Whether it delivers on the long-term aims for the energy sector. It supports the energy transition. It funnels investment into renewables. Who knows, let's see, but it's a good thing because they said they would do it and it's been one of the first things that has been delivered and constituted yeah, I think on the podcast we'd say look, we've got an open invite here to um uh dan and and to jürgen.
Speaker 2:I was very lucky enough to work with jürgen on the northern powerhouse, so where I would agree, you're good, they've appointed heavyweights like I don't think anyone can say actually these guys aren't to the sort of biggest industry names.
Speaker 1:Interestingly, both from Siemens. Different roles, different parts of Siemens, but both from Siemens Dan pleasure with working with in 2024. Again, brought in from industry, ran one of the major trade bodies on the renew from the renewable side, so let's see how he is with some of the other dimensions of the energy industry.
Speaker 2:but these are serious players that have been brought in with experience rather than simply being political appointees from, uh, westminster inner circles, um, so let's see how they get on I think where I would say in the 12 months that actually I think where we can be a bit of you know time and and certainly I think you know like we wouldn't be the first media organization to ask this challenge is that at the start it was talking about thousands of jobs in Aberdeen. Now they're more looking like 600 to 800 jobs and it might get to 1,000. So I think it's fair to say, rightly so. Itv Scotland there's this famous interview with Jürgen.
Speaker 2:In the past 12 months it was quite a tough time because obviously when you're forming a new organisation, especially with modern technology, the total roles, numbers is always going to be a bit in the air and it's a bit of a challenge. But the main man of the last 12 months and we've put this into good is ed miller band. Now it's very interesting in britain because it's sometimes very tough to reinvent yourself politically and I think especially when you're a leader of the opposition. I'm just thinking actually of our william uh, william hay, uh, the reason we say our guys is not actually a relative of mine, but you know it very much.
Speaker 1:William hay had a similar scenario it's a yorkshire turn of phrase for our foreign listeners yeah, uh, yeah, richmond yorkshire it was.
Speaker 2:Yeah, richmond Yorkshire was his seat and essentially, when we saw with Haig, was this leader of the opposition pelted at a general election, very difficult results, but then, almost a decade later, he comes back as a statement foreign secretary, a few years away in business, years away in business, and you've put Ed Miliband's political leadership under good. Obviously, he also had a tough election loss as the leader of Labour, but it's 10 years on from that and you've put his leadership under good, I think the first thing. He's still there, um, and therefore, why have you put Ed under good for the start of it?
Speaker 1:Well, it, is extraordinary, looking at his um political career, how he hasn't just reached the top job in certainly in opposition, but led his party, led it into a defeat, and I think we'll all remember that he didn't get the easiest of times in the media the bacon sandwich, uh, pictures, the miller stone, uh, with his 10 promises. But I think this is something which certainly he is familiar with it because he held the shadow position for energy security and net zero for a long time. And again, this isn't saying that Ed Miliband's approach is the right approach. That's not for us to tell you, that's for listeners to come up with their own mind. But I think credit is due where it is due for a political leader that is prepared to show a vision and leadership which they stick to.
Speaker 1:On a controversial energy in a controversial policy area, particularly when there are so many things floating around domestically, internationally, which could knock the government's priorities off course. Now, you've seen that in other policy areas. You've seen that in some of the attempted welfare reforms and in other areas. However, energy seems to be one of the briefs that over the last 12 months, they have been the most consistent in, by one exception that we'll come on to in a moment, come on to in a moment, but he has provided the transition with an intellectual political leadership which I think, regardless of whether you, if you're in the industry, whether you agree with it or not, and certainly great sceptics of it, will come on to them shortly, at least you know where the government seems to be going and that should provide at least confidence and stability.
Speaker 1:And lastly not is that the prime minister seems to support him, despite criticism from opposition parties, not just the conservatives, but also reform and others. Criticism from labor voting areas will come on to this that are around jobs. There doesn't seem to be any indication that Keir Starmer is going to back down on some of the energy commitments and indeed some would say in more of our friends in the climate space, that the delivery of the decarbonisation of the grid by 2030, some of these ambitious policies are at the expense of other environmental policies, potentially on nature and others. That the ambition which was articulated very early on in this parliament is energy decarbonisation and that will be, if anything at all, their legacy on climate.
Speaker 2:And I think what's interesting about it. Our listeners might not know that. Obviously, max, you come from a world of climate. I come from a world of oil and gas, and I think where I find it tough is that, although Miliband has been very clear with his direction, I think he's been very tough on my former colleagues, and I think that there's been a little bit of inconsistency with policies outside of his control. So, when the government looks at things like economic growth, they're up for supporting things like Heathrow and we'll get onto this later in the ugly section but but they're not up for supporting other industries.
Speaker 2:What I would say, though, is that what I do like from Starmer is this it feels like absolute loyalty to Miliband. I think that we've almost got past the stage now about where Miliband would be in a reshuffle, and also for those people that came to our partners at Wolf Power Club, where we met Charles Hendry he talked about it was so difficult because, essentially, you're always being changed. As energy minister, I think there's some crazy number of energy ministers. It genuinely feels like that miller band will be in place until the next general election to deliver on this, and therefore, what I would say is good outside of sort of some inconsistencies, is that I genuinely feel that leadership needs to back people for a significant period of time because an energy it does take massive amount of time, effort and finances to change infrastructure I do think.
Speaker 1:I mean I think you're. You are right, alex, but I what. I think the broader point here is that energy has undergone a huge increase in its priority, political prioritization for government of the day. For decades it was a middle-ranking minister. Nothing really changed. It wasn't as sort of sexy as war and peace and some of these other departments, you know, tackling down on immigration and others. Now it increasingly feels like this is a proxy test for the success of the government.
Speaker 1:And what is interesting is, you know, weighing up in number 10, as I'm sure he is, what Keir Starmer is thinking he has to do to be re-elected. He seems utterly committed to the Miliband vision backing him, seems utterly committed to the Miliband vision backing him. And in four, maybe less, years time, voters will have their say on whether or not they believe in this approach. But let's be under no illusion. Whatever happens between now and then, the price of energy, particularly for consumers, is going to be one of the major political footballs that the next election is fought over. And it is interesting, perhaps to Miliband's personal credit, that he seems to have the Prime Minister fully behind him. I don't see, having backed him as far to the hilt as he has, how he can change course now.
Speaker 2:And that leads me nicely on to, I think, a point you've just nailed there.
Speaker 2:Max Energy's never been in British politics one of the big five officers of state, whereas it now genuinely feels like Miliband is in Starman's not only his top five in importance but also in recognisable politicians from the government cabinet. That Miliband is right up there in British opinion. Whether it's like dislike, love, visionary or whatever, it's certainly there. But, Max, as you know, I'm a very fair school headmaster today in our report and like I would do, and I never forget the French school teacher who gave a wonderful verdict on my fantastic daughter skiing, and he was like Alex, your daughter came here crying every day and by the end of the week she stopped crying and I think that's a nice intro to the bad, because it's been a difficult year in britain and I wouldn't want our listeners that have just listened to the last five minutes to think, wow, it'd be great to live in britain right now, because there's something that is really hurting the core of british industry that relates to energy and that is the cost of energy. It seems astronomical compared to the rest of the world.
Speaker 1:Can you give our listeners a bit about the steel crisis that the government have faced in their first 12 months so the context of this is that the government promised support for green still and it hasn't arrived up fast enough to offset job losses from blast furnace closures.
Speaker 1:Now you hear a lot that's banded around the just transition, which roughly means and I think people have different definitions.
Speaker 1:You know, how do you balance the changes in the production of energy, which are often driven to date anyway by meeting climactic goals on emissions reductions, with not making society poorer, less equal, creating less opportunities, less opportunities, and in places like Port Talbot they have been on the forefront of that balancing act between how you manage what I think is increasingly seen as the importance of the energy transition, diversifying UK's energy mix, but how does that translate locally in terms of its community impact, in terms of local employment?
Speaker 1:And I suppose the political question is it's all very well having a policy, the energy transition voters don't feel that they are being supported, that they are being abandoned and decarbonisation is leading to economic dislocation. Are you opening up a new political field with parties like Reform that are looking to put clear water between the government and themselves? And I think that is probably the central political question that the department that Ed Miliband as Secretary of State on has to balance and also that Miliband has to fight in cabinet for where you have other departments who are responsible for the fallout for these policies perhaps when they don't go according to plan that have led to this feeling of economic dislocation, the increase of unemployment, increased job insecurity, with all the consequent inevitable things that stem from that.
Speaker 2:I mean let's not beat around the bush here, max it felt like the 1980s again. It felt like, you know, parliament had an emergency session to come into the weekend. There was no real plan. It was like almost from being elected this time 12 months ago. Lots of stuff was sat on and the reality is all the celebrations. When you see all these tweets from government and all these promotional things saying our last unit of energy by a coal fire power station, where we know the likes of germany and rwe still use them to have a mix of energy sources is that we have very expensive power in this country. We will be going into it more, but essentially for me it's like there's big heavy industry that uses lots of power, that the cost point right now puts all of those jobs at risk, and I think that it's something the government can recover from. But it does make me nervous that port talbot is the start rather than the end of these issues.
Speaker 1:But there's another bad item well, before we go on to that, I'll just say the other thing is we will and the uk has an increasingly unsecure geopolitical climate being able to produce domestically our own sources of things like steel. There will be people within government that will be looking at this not through an energy lens, not through a climactic environment lens, but through a national security lens. And if you lose those capabilities and you lose those skills and you lose those workers, it is not an option not to have no capacity within the UK to make steel. So let's see if you add that dimension again into the the cocktail of policy priorities that the prime minister is trying to juggle now.
Speaker 2:That is another interesting variable now we talked about the flip-flop, the flip-flop, the flip-flop either side, back and forward, basically like it's been brewing since the start of the episode, and I have to get this off my chest. It feels like starmer's in a position where he has a majority, and a very decent majority in terms of british government terms, but he has a group of mps that, on the whole, have not come into office to cut anything, even though there is huge overspend that has to be rectified by him and Rachel Reeves. And it feels like that Rachel Reeves and him come up with a policy from Treasury and this one's very energy specific and we'll go into a second, and then his rear guard push against it because they've got very small majorities of less than 2,000 seats in their constituencies and they don't want to upset anyone. Tell us about the flip-flop on the winter fuel allowance.
Speaker 1:So I mean there are a number of dimensions to this story. Partly we'll go into this on how can it be in the 21st century, with artificial intelligence and all the abilities to segment populations' data, that the winter fuel allowance is a blanket policy for pensioners of a certain age who will receive a certain amount of taxpayer-funded subsidy towards their fuel? I mean, back in the day, partly because of technology, it perhaps made sense. The government sought this was back in 2024, to limit the winter fuel payments but, to your point, faced backlash from across the political spectrum, including from backbench Labour members of Parliament who have always viewed themselves as the defender of pensioners, the defender of people who are not necessarily economically active, the elderly, for example, in this context, for example, in this context, and found it, I think, ideologically very difficult to square that, after spending 14 years opposing conservative austerity, conservative cuts to welfare, and campaigned on that, many of them for three, four general elections, that within four or five months of a Labour government with the largest majority in living memory, this was one of the first policies that it sought to enact, and I think the political question maybe is, or the lesson is yes, the government has this extraordinary majority, but it is a majority that in many, many individual constituencies is wafer, thin and backbench.
Speaker 1:Labour MPs, aside from their ideological objections, are no doubt looking at these very small parliamentary majorities and looking at their chances of being re-elected at the next general election.
Speaker 1:And what that means is that party discipline is perhaps not as strong as you might assume it would be and that's not around there being effective opposition from the other parties.
Speaker 1:That is simply at Labour MPs looking at not even sub-2000, many looking at sub-1000 majorities and thinking how does cutting winter fuel payments to pensioners in my constituencies particularly if their constituencies were the Labour Party's never really won before? How is that going to play out with my electorate at home? And what you saw was that the government had to reverse its policies in response to this rebellion from within the Labour Party. So it's an interesting take on the other political pressures on the government today as it seeks to enact policy reform. But to your point, which is some sympathy with, the logic behind the reduction of these payments is that the government has to reduce public expenditure and the government does not want to increase taxation. So it has said necessarily to meet its spending commitments. But it's a very interesting case study of the difficulties between what you might want to achieve if you're in government and the political constraints that are imposed on you by your own party in Westminster.
Speaker 2:I think, also like, because it always comes with any like either benefit or taxation or levy.
Speaker 2:It's about fairness. But I just want to scream at current politicians and and and it's not even the color of what part of that. They seem to ignore technology that exists today and and like. For me, you know, as someone who's been a previous director of an ai company that works heavily the energy industry we could sit down with a big electricity company and through clever tech they've been able to say, establish the millions of customers that might be vulnerable. So you don't have these blanket benefits that say, for instance, whether you are worth millions of pounds and driving Ferraris, you get the fuel benefit, or whether you are deep impoverished. You don't need human beings to sort that out. You can look at buying patterns, consumption of energy units, and if anyone wants to contact the wolf power club about sources, about how you get the very best ai consultants in to sort that, we are happy to help out, whether it's politicians or business it's interesting now, alex, I mean on that point, just looking back my time in in germany last again they have these similar problems.
Speaker 1:They're really outdated state processes and what I thought was interesting, this new government that's come in three main priorities around reductions in immigration reductions, consequential reductions in social welfare benefit, and it's all to do with defence, which is a separate point, but they have created a new ministry for digitisation and state modernisation. I think is how it translates. But it is exactly like this to speed up government efficiency, government bureaucracy and, you do think, taking that approach and applying it to the winter fuel payments. Why do we have a system that, in the 21st century, with all of the tech innovation that we have, that is being imposed as a blanket policy rather than being able to tailor it to those in need?
Speaker 2:extraordinary so we now go from a flip-flop politically to a situation that was a national embarrassment that you couldn't even take your flip-flops abroad, but more embarrassing over a quarter of a million people couldn't move on this certain day, and this is the blackout for the best part of 24 hours at heathrow, the biggest airport in the United Kingdom. And the reason we've put it under bad and not ugly is that there was probably years of neglect building up to this, and it was not all on Labour's watch, but now Labour is the custodian of energy security. Tell our listeners more about your view on Heathrow and why we've put it into the bad category.
Speaker 1:I think you're right. I don't think there were individual decisions made by ministers in which, in the 12 months since they've taken office, the government created the problem in Heathrow Similar, I think, probably to the problems on the continent as well. But I think it goes to a point which is around once you build infrastructure, you do have to maintain it and you have to have a plan for maintenance. It's one of the things I think that is often overlooked just before coming on to Heathrow, that the people criticizing some of the costs that are associated with net zero, whatever that means the energy transition often overlook the fact that, well, yes, the energy industry costs money. Even if you stayed with the same energy system infrastructure that we have at the moment, it still needs to be replaced and it actually needs to be replaced now. So cost is always at the point.
Speaker 1:But maintenance, I think it is often overlooked and I think the point you go to now is in the 21st century. Overlooked, and I think you're, the point you go to now is in the 21st century. You have an interruption to energy supply. The consequences for that are far reaching quarter of a million, I think you said, disrupted by heathrow and long lasting and often life-threatening and I think that, look, we don't know the outcome of heathrow yet and this is purely a gut feel.
Speaker 2:but my gut feel is it's probably been years of neglect on infrastructure, years of cutting budgets for basic maintenance of grid systems. We don't have an answer yet and I think when the answers do come out from the inquiry, we'll sit down and publish those to our listeners because we just don't know at this stage. But it's a gut feeling of ours.
Speaker 1:But, as I said, I think you know this isn't just happening here. I mean, I saw the rather entertaining images of the chap in Spain who, when the energy went out, was mid barber and the shears went off and he had to leave the barber with half his hair being cut. But I mean, it just shows, though, today, how reliant we are on the. It is a given assumption that there will be a constant energy supply, and when that gets interrupted, um, it has catastrophic and far-reaching consequences yeah, now the next section.
Speaker 2:I don't actually just want to do like you know, because our title is good, bad and ugly. You know, you know that three words that work nicely from historical, you know wordsworth. This is actually pretty depressing, like the things we're going to talk about now are affecting hundreds of people and potentially thousands of people, their livelihood and incomes livelihood and incomes. I'm absolutely gutted at some of the things that we're about to talk about because I so feel that it's being done by political, human intervention. And the thing that I really want to see your opinion about, max, but it has to be under the ugly is the North Sea.
Speaker 2:The North Sea feels like wind-filled tax. A policy that came in where there were big energy profits has actually been a tax that's been expanded and increased to hit one place in particular Aberdeen. As you know, I'm an absolute loyalist to the people up in Aberdeen and I'm a firm believer in the oil and gas industry up there, and I just feel that uh and we'll play a little clip now of robert gordon's university report that feels that 400 jobs have been lost labor's windfall tax on energy profits in the north from the north sea is designed to make us less reliant on people like vladimir putin.
Speaker 4:When I was campaigning in Hamilton last week, voters were asking me why the SNP, Tories and Reform were so against our windfall tax. I could not explain. Can the Secretary of State?
Speaker 5:The. Prime Minister, I am grateful for the question, because what astonishes me more than anything else is that the shadow Secretary of State for Scotland was the Energy Minister when the EPL was brought in. He shakes his head, but he was the Energy Minister. Indeed, the leader of the SNP in this place, you may remember, didn't support it, supported it, didn't support it, then had it in their manifesto to extend it to every single Scottish industry. So I'm as at a loss as you are.
Speaker 3:I ask what the Secretary of State makes of the report published by Robert Gordon's University this week that warns of 400 job losses every two weeks in the North Sea.
Speaker 5:We've had this discussion across this Dispatch Box a lot during questions Clean energy by 2030, setting up GB Energy in Aberdeen. Something that he voted against, of course, is to make sure that we have that just transition. We do have a declining and mature base and we need to make sure we create the jobs of the future and the future industries that are there for all to see in Scotland. He should support that rather than voting against it, and the EPL was brought in by his government.
Speaker 3:It isn't the Conservative party saying this, it's the Robert Gordon University Energy Transition Institute. These mythical jobs in renewable energy simply don't exist. Yet there is a slowdown in offshore wind deployment and a steep decline in offshore oil and gas activity as a direct result of Labour's ideological policies 400 job losses every two weeks, a steep decline in skilled roles, nowhere for supply chain jobs to go but overseas. A decline in the workforce of 25%. And why? Because of massive investor uncertainty due to negative sentiment around oil and gas because of the ban on licences and the EPL extension.
Speaker 2:We see the passion of the politicians there, but talk us through your field, north Sea because it feels like almost because Aberdeen's so far away from Westminster, no one cares about the 200,000 people up there in the Parliament side. Or have I got it totally wrong, max?
Speaker 1:I don't know if you've got it totally wrong. I think the context here is there are some regions Aberdeen is one where they are energy dependent, by which I mean we're all energy, we all need energy. But local employment, economic growth, investment in local communities, even down to business rates that councils receive A lot of it is dependent on the energy industry and in cases like Aberdeen that energy has been largely from the North Sea. I mean, I think that there was a debate in the last parliament and again there is no consensus on this politically that I've really detected about whether or not new licenses for oil and gas exploration extraction leading to extraction should be given. Now the opponents to this say it sends the wrong signals when we're trying to channel investment into renewables as well as the general affordability of the North Sea exploration. But it is broadly seen as a climate gesture in supporting the government's backing of the net zero transition, skeptics, I think, would say.
Speaker 1:Some would say down south that we still need oil and gas as part of the transition. But I think from a political perspective it ties back to how does the energy transition not lead to economic dislocation? And some might say it stokes localised opposition towards some of the broader policies. Local leaders in places like Aberdeen have complained to Westminster that what they feel is it's a sort gas licenses, is that you need to have more than a deadline and a policy objective to have local buy, and you also need a strategy to manage that transition to minimize the impact on the local community, and there has to be a replacement industry that creates new jobs, employment, etc. Otherwise, what you're going to see is areas like those energy dependent regions becoming more and more dependent on state support, which is something I think um we'd all not like to see, and to see them fall into areas I just got a step in there because, like I feel that it's almost gone the the complete other way.
Speaker 2:I mean, like, when you put a real taxation and willful tax on these 76 percent, what have been the consequences? Multiple foreign investment has left the country or is going to leave. So you know, multiple companies have said they're going to leave the north sea. There's been massive restructuring, so equinox shell have announced their plans that they will leave as entities and form a new joint body.
Speaker 2:We've had the likes of harbour that talked about the impact and the redundancies they have to make, and I think what I struggle with is timelines, and I think sometimes politicians do. There's still a basin. I appreciate the basin might be maturity, but there's still a long way to go. There's still 200,000 people, some of the most skilled engineers in our country. They're probably the same people that, if they can be kept in the industry, we'll be doing the carbon capture solutions of the future and what I'd like to say is that, wolf Power Club, we are behind you, aberdeen, I'm going to be up there in September for offshore Europe and I think we're going to have to have more on this debate. But we're running out of time, max. We've got to go on to more ugly. So that's one way, ladies and gentlemen, to not have a right reply for Max. Let's talk about energy prosperity, because we've had a couple of companies either going to liquidation, full closure.
Speaker 1:Tell us more about this ugly part of the industry that might have happened in the last few months I think it's actually continuity on the point I was saying, which is that no one should underestimate the um, the scale of what the energy transition would do for this country, and that's not a positive or negative assessment, because the risks inherent in getting it wrong are unemployment, the loss of the investment from foreign companies, and that's not just macro figures that you see on the newspapers. That is and the Drax example is a very good example of this where one of the largest investors into STEM subjects, stem education, community investment places like Selby, was Drax Now, which has been put at risk. So I don't think we should just think of it in terms of just think about big government and big corporates. The impact of the transition, if it's badly handled, is felt right right at the ground.
Speaker 1:I don't know if you want to talk around um prax, but drax, um, the government has made a decision to accelerate the closure. This is to do with concerns about how sustainable biomass subsidies have been. But, as I said, that community impact is real. It starts not just with 900 jobs that potentially are threatened in the area. It affects the whole supply chain, including the people that provide the it, including cleaners that look after drax facilities. The knock-on effects are really, really significant. But it goes to the point saying, on managing the trans, the threat that the transition uh can pose to local economic growth.
Speaker 2:I don't know if you want to talk particularly about racks, which is, yeah, more in your, more in your professional I mean it's happened in the last few weeks is that that for our listeners across the world that don't know is that um prax was a very, very fast growing midstream and downstream company and um a number of a few years ago they bought lindsey oil refinery off um total and then in the last two weeks it's gone into receivership. It's now being a managed sale by fti consulting and we will hopefully cover the story more in depth. But we'll have to look at. But it's these key common business problems that the government's facing and I would say that sometimes there are commercial business decisions that are taken that aren't the government's fault at all. But I think areas where they do create, let's say, the playing field is that one.
Speaker 2:The cost of credit has gone up significantly and I think what people don't quite understand is every time the government doesn't cut spend, it's nervousness in the financial community and therefore interest rates have a pressure on them to go up because they feel there's there's there's an imbalance of or sources and there is an indication with prax, lindsay or refinery that the pressure of the change of credit terms is one of the things that they're forced under. The next bit, which our government is deep into now and it's kind of had its honeymoon period over. I don't think the honeymoon period's ever that long in british politics.
Speaker 2:This was short this was very short um, but essentially is that for a midstream or downstream energy company to do well in britain, you need prosperity there and what I mean by that is you need building going ahead, you need companies feel like they can spend, you need people saying yes to decisions.
Speaker 2:Ron saying we'll re-look at that in six months' time, and I certainly know that you know like a boom time of when actually it was a very good time to open up, you know more assets in the downstream. I remember around the Olympics there was such a feel-good factor that the economy was really growing, really booming. I remember when Cameron came in as well, there was a real jump in confidence in the economy and that inevitably helped the downstream energy industry. I think that the other thing of where the government again has to look at in terms of economic prosperity, if the absolute unit cost of gas and electricity is so high, heavy industry again is going to be really affected and what we see is that you then hit on the old energy trilemma, the impact it has on energy security, by losing potential things like refineries. But I say the story's not over yet there.
Speaker 1:They are looking for a buyer and we really hope the best of success for them to do that I mean there's an interesting thing that always, I think, point to be made on this that you know the politicians will sit around and agree an objective, um, and the objective in this case would be yes, prime minister, it is absolutely right that we uh meet our emissions reductions target, that the energy transition is a good thing, I completely agree with you. But in um, but of course, my constituency, that's actually very difficult. And whether you are the MP representing the area affected by Drax or Prax or wherever it may be in Aberdeen, yes, prime Minister, your objective is absolutely right, but in my area it won't work because this is the consequences. I mean you can apply this into any policy area. Immigration, you know, yes, we must, I agree that immigration should come down, but in my area actually we need more of it and I think that, to be fair to the government, that is really the art of politics is how do you take macro level political objectives that you have, hopefully you believe in, political objectives that you have, hopefully you believe in and you do send clear signals, but balancing that with an understanding of how that works out on the ground.
Speaker 1:But, as I said, I am pretty certain that ed miller band will have had numerous labor backbench mps who will say in the breadth of you know one meeting with him. You know you are absolutely right on what you're trying to do to accelerate the energy transition. You're absolutely right that the UK must be a climate leader. But of course in my constituency I've actually got X or Y where this is going to cause harm so we can't do it there. A difficult thing to square. If you're the prime minister and if you're trying to build public confidence in what is whether it works or not, that's see what happens. Thing to square. If you're the prime minister and if you're trying to build public confidence in what is whether it works or not, that see what happens.
Speaker 2:You're trying to build public confidence and consensus behind a political vision so we've got to wrap this up like any parents day meeting and uh, you know, uh, looking at the things we've covered the good, the bad and the ugly, I'll go first max my overall opinion that if you're going to give them a grade, I would personally say c minus right now.
Speaker 2:And the reason I would say c minus is that I agree with the points of clear political vision backing ed miller band. There's obviously a lot of grief in ccs but I feel that this misunderstanding of business and industry, the effects of jobs at the moment, a flat economy economy and nervousness. But I do think there's shoots of green hope, or you know, I remember that was news a lot, the green shoots of hope. And I think the green shoots of hope is I think GB Energy can deliver big with the people they've appointed. I do feel that essentially there's some things that have gone wrong in the first year that could be rectified and actually sometimes that this time, a year in, helps the government to think really what their objectives are. So if I give a c minus max, what's your view of the good, the bad and the ugly in the first 12 months of the labour government?
Speaker 1:I probably wouldn't mark them now and that's not a. That's not a, that's not a cop-out. I think that they have set out there and this is I mean, I mean this to be objective. They have set out their policy aspiration, set at the start pretty clear, and by and large, they have um tried to stick with it. But now it comes into delivery and the.
Speaker 1:The question for them, if you're interested in government affairs, is how do they make industrial and regional policies less patchy? How do they bring the public with them, not making them feel this is something that's done to them, but they're, they're part of. That's always an important, it's always a one route to failure. Whether you're talking about planning at a tiny level or a big level, you've got to carry the public with you. So I would lead to see them and they deliver this, build greater public confidence, trust that this plan actually will be delivered. You maybe have put in place the skeleton, like gb, energy, etc. They may have provided, through ed milliband, a sense of what the government wants to achieve in this parliament, which is pretty clear. Mission control was established to deliver that decarbon the grid by 2030. Let's see how good they are at delivering that. So at this stage, a quarter way through the uh, through the parliament, I would probably give them a c plus.
Speaker 2:Very good, max, very good. Um, as say, we will always love to have the government on. We had michael shanks on earlier on the season. Um, we're happy to have them on to have right of reply if they agree with their school report. Um, also, um, listeners, just to say we are going to be out and about. I can confirm that we're going to be at the british motor show if they agree with their school report. Also, listeners, just to say we are going to be out and about. I can confirm that we're going to be at the British Motor Show come August.
Speaker 2:We are also working heavily away of the summer. There's no break on the Wolf Power Club. We're going to be out every single week and what I can say is, if you are interested in recruitment solutions, aim Recruit are building up workforces over the summer for people. And also I can say if you want to become a partner of the spectators energy summit, give us a bell happy to sit down and show you the opportunities.
Speaker 2:The final thing I'd like to say is a fan shout out. So last week we had some of our younger fans and today I can give a shout out to Estonia. We're now in 71 countries. Our 71st country was Estonia and I've got a nice story about Estonia, max. So when I was debating across the world, the European finals were in Estonia and I was very gratefully invited out to Estonia and at the time I only knew one famous Estonian and that famous Estonian was the Derby stroke Arsenal goalkeeper, uwe Puhm. Anyway, when I arrived in Estonia, not only does the capital have one, but it had two Depeche Mode bars that were fantastic. But as I walked into the hotel, who was at the bar? But uwe pooms, I met the most famous here staying in on day one. Just big shout out to estonia. We're delighted you're listening and if you've got any friends or family shout outs, contact the podcast or put on the next episode. Max, thank you for your time today.
