TTwo years on, and it is already clear that this century will require challenges and responses for which, with one or two honorable exceptions, the mindset of Britain’s Conservative Party has been quite unprepared. This century does not require a small country – it requires an agile country. More years of denial and the UK will face very serious economic and social problems.
Last week, a microcosm of the stupidity of the small country emerged, as it ceded a key area of 21st century economic activity to France and undermined our national security — with close observers believing that no minister even knew the extent of their rudeness. I’m talking about the merger, on French terms, of the former British-controlled space company OneWeb with the French company Eutelsat, thus strengthening the European Union’s efforts in the field of space. The Brexiteers are notoriously inept at getting Brexit done. But then inefficiency comes with territory.
OneWeb was Britain’s opportunistic way to reclaim the land we lost in space due to Brexit and the ensuing forced exit from the European Union’s Galileo and Copernicus programmes. Boldly save her from insolvency Presentation of £500 million by the UK government two years agoOneWeb has valuable “shells” in distributed orbit and spectrum rights, believed to represent a staggering 15% of the total space available for service delivery to Earth. This spatial real estate is the basis for a unique constellation of satellites and for the next stage of commercial space development and sophisticated communications – worth tens of billions in the coming decades. Last week, Tory ministers let it slip through our fingers.
The Ukraine war forced OneWeb to reschedule its satellite launch program, at some cost. Every shareholder except the British agreed: the tax cuts were more important, the state should be reduced and the market should be governed. Eutelsat witnessed the opening, secured the approval of the OneWeb board of directors and offered the deal to buy out the risk-averse Britons.
But beneath the face-saving trinkets about retaining a board seat and a gold stake, Britain will no longer have control over the future space systems developed by OneWeb or how any of its spectrum is used. Johnson may be a liar, a constitutional subversive, and corrupt, but he had the nerve to launch the deal (led by Dominic Cummings). Britain’s stated goal is to be a globally competitive space power. forget that. Sure, Prime Truss wouldn’t dare try any OneWebs.
But this resilient state mindset is exactly what is needed across a series of policies – not the apprehension of tax cuts, the ambition, the fascination of markets, the wake-up attack and the re-schooling of grammar.
A good example is the broken energy market. British consumers face the highest energy bills in Europe. It should come as no surprise: The approach embodied in the OneWeb deal has been applied to the electricity market. The electricity tariff is not the average price of the electricity produced by the varying power generators, as it was at the direction of the Central Electricity Generating Board of the “large country”, ensuring that there are no violent price hikes. Amazingly, our bills are being billed at whatever price is required to bring the most expensive product into the grid to complete the necessary base load – not reflecting the contribution of low-cost renewables and nuclear power. Thus, tariffs on consumers are as high as they could be, reflecting the higher spot market price of gas.
And the market madness doesn’t stop there. Unlike a car, a TV, or a new dress, electricity doesn’t differ by product: it’s invisible. There is nothing that differentiates electricity. It is the least suitable material for market formation. But in the small country mentality of the Conservative Party, markets are always best, so the dogma is that different producers – wind farms, nuclear power, gas-fired power plants – make up a market to sell electricity to each other within a short time. Long term contracts? Calculating average costs across all generators, rather than being tied to the most expensive generator? This means a lot of big state.
The Ukraine war and the skyrocketing oil and gas prices have skyrocketed the perception. Thirty suppliers have gone bankrupt. Bills have always been going up, but a more rational electricity production and pricing system, along with building incentives to build low-cost renewable energy quickly, could have delivered some of the sting. As a UCL professor Michael Grob arguesThe price difference between cheap renewables and expensive gas is now “unreasonable”.
What do I do? Every energy producer must be required to incorporate as a public benefit company in emergency legislation, which constitutionally compels them to put consumer interest before profit as a corporate objective. Dealing with the newly formed power generators, the regulator Ofgem must collect the costs of a now open ledger and calculate a standard tariff for all consumers that reflects the lower production costs of renewables and nuclear power. Expensive gas-powered generators that would now cause losses (such as The French have done with EDF lately) or offered 50-year soft loans and grants to counteract. Producers have to bear some damage due to rising gas and oil prices; Consumers should not take the hit.
Planning laws should be relaxed immediately to allow onshore wind farms to be built, with those local communities sharing some of the revenue. Interestingly, Grob suggests creating “green energy parks” where renewable producers would store their cheap energy for sale to consumers. There should be an extensive program of home insulation and the creation of a national network of electric car charging points. Rebates should target the less affluent consumer energy bills.
Such is the agile state of the twenty-first century – a notion that Liz Truss and Rishi Sunak know will not win the votes of elderly Tory members who idolize Mrs. Thatcher. Instead, it is better to abandon Britain’s stake in space and attack cheap renewables as “wake up”. This satisfies the Conservative Party. The chasm between the real world and the world of the Conservative Party has never been so deep.