Ed Miliband abandons plan to charge less for electricity in Scotland
Ed Miliband has abandoned plans to charge southern electricity users more than those in Scotland, after senior officials warned it could put off investors and make it more difficult to build renewables,Sources have told the Guardian that the government has decided not to proceed with the scheme, known as “zonal pricing”, and that the decision will be announced once it has been signed off by the cabinet,The plan was first proposed by the Conservatives as a way to encourage heavy electricity users to relocate to areas that have more generation such as Scotland, where windfarms sometimes have to switch off because of a lack of demand,The proposals were heavily backed by Greg Jackson, the founder and boss of Octopus Energy, but triggered a backlash among many other energy companies including SSE, Scottish Power and RWE,One source said: “The government has been weighing this up carefully and concluded that the benefits of delivering the clean power mission at pace, particularly given the expected impact of imminent grid upgrades; the need to deliver on the coming renewables auctions; and the significant risk premium being attributed to the UK by international investors, would outweigh the purported benefits of zonal pricing – which at any rate would take beyond the next election to implement.
”The energy department declined to comment.The proposals would have set lower electricity prices in areas where supply far outstrips demand, in an attempt to encourage industry to move into those areas and reduce the need to switch off generation.Windfarms are sometimes paid to power down when renewable energy threatens to overwhelm the grid.Zonal pricing could have cut the cost of renewing and updating the country’s electricity grid by billions.A report by FTI Consulting predicted overall savings of £52bn for consumers over 20 years, while another, which was commissioned by Octopus, found the UK would need to spend £27bn less on major grid upgrades in the future.
The plans threatened an outcry from the sector and the wider public, however,Alistair Phillips-Davies, the outgoing chief executive of SSE, said recently the plan would be a “huge mistake”, saying it would create a “postcode lottery” where some households would pay £200 to £300 more because of where they live,An independent report co-authored by Rob Gross, the UK Energy Research Centre director, found the benefits of zonal pricing could easily be wiped out if renewable energy developers demanded higher subsidies to offset the risk of the new scheme,Miliband is already under pressure from Downing Street to show when his sweeping reforms to the energy system will bring down bills for ordinary consumers, with No 10 officials increasingly concerned about the threat of Reform UK,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionDowning Street intervened in the zonal pricing debate after aides to the prime minister, Keir Starmer, became concerned about the possible effect of rolling out plans which could lead to price rises for some consumers.
Some also worried about the impact on international investment, which is seen as key to building the energy infrastructure that the government has promised.The French company EDF confirmed on Tuesday it would take a 12.5% stake in the Sizewell C nuclear plant, boosting ministers’ promises of a “golden age” of nuclear power.Advisers recently held meetings with a number of energy companies to discuss potential alternatives, and the government has now decided to abandon zonal pricing altogether.The decision has gone to senior ministers in a process known as “write-round”, and will be announced before the next renewables auction which is scheduled for early August.
Officials are now focused on finding alternatives to zonal pricing which might encourage businesses and manufacturers to locate to electricity-rich parts of the country.They include paying battery storage companies to build major capacity in Scotland, or paying them to turn up their capacity on particularly windy days.One government source said the search for other plans was “where all the brain power is now being expended”.
Labour MPs alarmed by rise in sponsored events arranged by party
Labour MPs have privately raised alarm at the number of sponsored corporate receptions for backbenchers that have been arranged by the party, amid concerns about perceived conflicts of interest.MPs have received invitations for networking receptions that include explicit advertisements for property developers or public affairs firms. The invitations are sent to MPs directly from the parliamentary Labour party (PLP) office and forwarded by party whips.“The PLP office has literally become a public affairs agency,” one MP said. “The wording is genuinely shocking
Starmer and Macron agree that ‘new deterrent’ needed to stop small boats, No 10 says – as it happened
Downing Street has issued a statement about Keir Starmer’s talks with Emmanuel Macron over lunch today. It says the PM and the president agreed that “a new deterrent” was needed to stop the small boat crossings.This seems to be a reference to the idea of a “one in, one out” returns scheme, which would involve migrants arriving illegally in the UK being swiftly returned to France, but with the UK also agreeing to take in an equivalent number of migratns based in France who are claiming asylum in the UK. Starmer is said to be urging Macron to accept a deal of this sort, but Macron has reportedly been resisting, and the idea is unpopular with some other European countries. Last month Spain, Italy, Greece, Cyprus and Malta wrote to the European commission complaining that such a scheme could incentivise even more irregular migration into southern Europe
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Spare a thought for Rachel Reeves. After last week’s mini-meltdown during prime minister’s questions, the chancellor is now condemned to spend the next year grinning manically every time she’s out and about in public. Having a bad day at the office? GRIN. Had a row with the kids? GRIN. Now there is no escape
Caught between the Senedd and Westminster, Welsh Labour risks collapsing loyalty
Playing Tom Jones and Catatonia at the decks and later taking to the dancefloor wrapped in a Welsh flag, Eluned Morgan, at least, was having a good time at the Welsh Labour conference in Llandudno last month.But almost a year into the job as first minister of the Labour government in the Senedd, working alongside a Labour administration in Westminster, the party arguably does not have much to make a song and dance about.For 100 years, the Welsh have been Labour’s most loyal voters, and they have returned the party to government in Cardiff since devolution almost 27 years ago. But poll after poll now says Labour’s base has collapsed and the party will come third in the Senedd elections next May, after Plaid Cymru and Reform UK. In Westminster, the worry is the Welsh elections will prove a bellwether for the next general election in 2029
MPs and peers make awkward small talk during wait for box-office hit Macron
It wasn’t quite the Pyramid stage. When the queen, the pope, Nelson Mandela and Barack Obama were invited to address both houses of parliament, they were given Westminster Hall. On the first state visit of any European leader since Brexit, Emmanuel Macron had to make do with the Royal Gallery. The UK has been on quite the journey since Liz Truss was unable to identify the French president as friend or foe.Still, the Royal Gallery is not a bad second-best
Macron tells UK parliament that Europe must end its dependency on the US and China – as it happened
Macron says European countries must end their “excessive dependencies on both the US and China”.He suggests China’s use of subsidies are a threat to fair trade.And he says that President Trump’s trade war is also an attack on WTO rules.He says the European democratic model is as under threat from “foreign interference, information manipulation, domination of minds by negative emotions and addictions to social media”.UPDATE: Macron said European countries had to break away from economic dependence on the US and China
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