The energy transition - Labour unpick the past and outline their policy vision

Labour have hit the ground running on energy policy issues with several significant announcements in the days after coming into power. Ahead of the King's Speech tomorrow (17 July), we look at the key developments in the last two weeks and what we might see going forward. 

 

onshore wind

The first major move to draw a line under the policies of the Conservative Government came within 72 hours of taking office.

Since 2015, there had been a ‘de facto’ ban on onshore win in England. The National Planning Policy Framework (NPPF) contained two innocuous-looking footnotes which set a high bar in terms of where onshore wind projects would be acceptable, and required the proposal to have community support – with the latter often meaning that any opposition to a project ended up scuppering it. Changes in September 2023 loosened the requirements slightly, but the response from renewable energy companies suggested that the changes had done little to move the dial.  

The Labour Government’s policy statement on onshore wind – implemented on 8 July - has done away with those two footnotes in one fell swoop, and has effectively brought onshore wind planning applications in line with other energy development proposals. Labour’s new draft NPPF sees these footnotes deleted in their entirety. The change, which came into force immediately, will be confirmed to Parliament on 18 July once the House of Commons has resumed sitting.

It is worth stressing that the change in policy does not give carte blanche for onshore wind projects as they still need to be properly assessed and examined, and any decisions would still be open to legal challenge. But renewable energy companies have so far reacted positively.

Alongside this, there are wider plans to update the NPPF to support renewable energy development. Labour have also committed to running a consultation on bringing large onshore wind proposals into the Nationally Significant Infrastructure Project regime – which would enable quick determination of planning applications and the grant of Development Consent Orders. The Chancellor has signalled that this will be out by the end of the month. Changes to the relevant National Policy Statements are also expected later this year.

The above consultation exercise is likely to be wide-ranging, with a number of stakeholders expected to input into the exercise – from energy companies to local authorities, as well as community groups and organisations who may be impacted by the relaxing of the planning regime. Despite the clear policy intentions underpinning the proposed consultation, the Government will have to ensure that it carries out the consultation with an open mind and properly consider the responses it receives.

 

waving the white flag - whitehaven coal mine

A further sign of a clear shift in approach is in the Government’s approach to the approval of a new coal mine in West Cumbria. The controversial project approved by Michael Gove as the Secretary of State for Levelling Up, Housing and Communities was subject to a legal challenge by a local community group – a challenge which the Government had been defending vigorously.

But ahead of a hearing this week, the new Secretary of State, Angela Rayner, instructed her legal team that she is dropping the defence to the challenge in light of the Supreme Court decision in Finch after conceding that there had been an “error of law” in the 2022 decision to approve the mine.

The case is still proceeding as the operators of the coal mine continue to defend the claim, but the Secretary of State’s decision signals a clear shift in approach away from fossil fuel projects.

 

the future of the north sea

This is also reflected in the Government’s approach to the future of the North Sea. Rumours last week that Ed Miliband, the Secretary of State for Energy Security and Net Zero, had ordered an immediate ban on new drilling in the North Sea were swiftly quashed. But the stated direction of travel is firmly towards the winding down of exploration in the region.

The immediate political and legal challenge for the Secretary of State arises from the ongoing 33^rd oil and gas licensing round, where applications are currently in the North Sea Transition Authority’s (NSTA) pipeline. If the rumours around blocking the applications are to be believed, this may well give rise to public law issues in circumstances where organisations have already spent large sums of money on preparing and placed bids before the NSTA, and where licences under the 33^rd round have already been granted to other organisations in earlier tranches.

On the flipside, the Secretary of State will not want to be associated with the issuing of new licences under his watch. Legal challenges have been threatened against grants of licences in previous tranches of the 33^rd licensing round, and a further grant of licences under this round may bring with it further such challenges from campaigners.

 

policy meets politics

The Government’s priorities are also evident from the appointments made by the Prime Minister and Mr Miliband in the days after the election.

Mr Miliband’s team is now packed with junior ministers who have strong backgrounds in energy and climate change policy. One of the items in their in-tray will be the publication of an updated Net Zero Strategy after two previous iterations of it were found to be unlawful for different reasons (including most recently in Friends of the Earth & Ors v Secretary of State for Energy Security and Net Zero [2024] EWHC 995 (Admin)).

The approach across the new administration to appoint non-political policy experts to key ‘delivery’ roles is also evident when it comes to its energy and climate change leadership group. The most prominent example of this is Chris Stark. Stark, who was chief executive at the UK Government’s independent climate advisory body (and a critic of the previous administration’s approach to reaching Net Zero by 2050) is the head of ‘Mission Control’. Mission Control is a team of policy and industry experts overseeing the development and delivery of a plan to transition the power system by 2030.

 

gb energy

The Government is also likely to be press on with another manifesto commitment – the establishment of Great British Energy.

Early plans suggest that Labour will set this up as a new publicly owned company with the aim of investing in homegrown clean energy sources and providing cheaper prices to consumers. Funding for the company – estimated to be around £8bn over the term of the new parliament - is likely to come from a windfall tax on oil and gas firms alongside Government borrowing.

The ambitious aim set for GB Energy is to work with the private sector in order to double onshore wind, treble solar and quadruple offshore wind production by 2030.

 

the 'rooftop' revolution

Solar power also features prominently in the Government’s plans. Approval for three solar farms in East Anglia, Lincolnshire and Rutland had been delayed several times under the previous administration, but Development Consent Orders for all three projects were swiftly granted on 12 July by Mr Miliband.

The Government is also expected to streamline the process of installing solar panels on new and existing homes.

 

what next?

A new Government with fresh impetus is trying to do things at pace with a clear message around the need to drive the transition to Net Zero whilst also reaping its economic benefits.

However, the fact that things need to be done at speed does not absolve Ministers from consulting properly on changes when required to do so. Similarly, the Government will expect to use its parliamentary majority to introduce / amend primary legislation and regulations to fulfil their policy agenda, but there may be risks if they run before they can walk by pushing through policy changes through executive fiat without proper changes to legislation. 

The King’s Speech will give further clarity on the Government’s priorities, with energy and planning highlighted as key sectors to charge growth across the UK.

In the short term, businesses, communities and other stakeholders affected by Labour’s significant policy agenda should monitor developments closely and look at:

• Preparing detailed responses to key consultation processes to ensure that Ministers have a wide spectrum of perspectives before them when taking decisions; and
• Monitoring Government decision-making to ensure that all decisions are taken in line with existing legislation and regulatory frameworks.

 

further information

If you have any questions or concerns about the topics raised in this blog, please contact Sahil Kher.

 

about the author

Sahil is a senior associate in the public law team. His practice covers all aspects of public law from judicial reviews to public inquiries, with particular expertise in environmental and climate change judicial reviews, planning challenges, human rights-based challenges, and public procurement litigation.