Wind farm nimbyism means 10,000 jobs just went to Ireland

We're saving money, but Ireland is getting the work.

Yesterday the UK and Irish governments signed an agreement that could see British businesses and consumers funding wind farm developments in Ireland that will export electricity to the UK. As a way of mollifying wind farm critics and keeping costs down, the UK government’s approach is understandable. But the majority of Brits who favour wind power may question why they are paying for jobs in Ireland when unemployment is still at 7.7 per cent at home.

The scale of wind farm development in Ireland that may result from yesterday’s agreement is huge. One project alone, called Greenwire, could see 700 wind turbines with 3GW of generating capacity being built. The UK has a target to generate 30 per cent of its electricity from renewables by 2020 so this project could contribute a tenth towards that goal.

To enable projects like Greenwire to go ahead the UK Government will need to provide financial incentives to developers. If they use the same approach as has been proposed for developments within the UK, the government will guarantee developers a set price for the energy they produce. The money required to meet this guarantee will come from increases to the energy bills of consumers and businesses.

In one sense this is a sensible move. Despite onshore wind power being the cheapest renewable technology, there is a vigorous campaign against expanding its use in the UK. If the growth of onshore wind is restricted and options for producing renewable electricity are limited to the UK’s borders, more expensive technologies, particularly offshore wind, will be needed as an alternative. The Greenwire developers claim their project will actually save consumers and businesses £7 billion compared with a scenario in which an equivalent amount of offshore wind was built.

So far, so good. But there is a catch: by outsourcing the generation of cheap onshore wind power to Ireland, Britain will miss the opportunity to create good quality jobs, develop skills and secure a comparative advantage in a burgeoning sector with huge global potential. Greenwire alone will create 10,000 new jobs in Ireland during its construction phase and 3,000 jobs in the longer term, so the developers claim. These are jobs that could be going to Brits.

Greenwire is a concrete example of how anti-wind farm campaigns could cost the UK jobs and growth.

Campaigners tend to be concerned about the aesthetic impact of wind turbines on the countryside and this must be taken into account. Less valid, however, are claims often made about the effectiveness of wind power technology. The Institute for Public Policy Research has shown that wind power is an effective way to reduce carbon emissions. Furthermore, challenges posed by the variable nature of how much electricity wind farms produce, because the wind doesn’t always blow, are often overstated. This variability can be easily accommodated by the grid, posing no threat of power interruptions, at the levels of deployment expected for the technology by 2020.

The scale of opposition to onshore wind often seems larger than it is. This is because campaigners concerns have been amplified by certain segments of the press and championed by several government ministers including the Energy Minister, John Hayes. In fact most of the UK public consistently supports expanding the use of the technology.

These supporters should get angry if their money is used to support wind farms in Ireland instead of the UK, because major job and economic opportunities will be lost.

Editor's note: The headline of this piece was changed on 25 January at 15:45

Wind farms. Photograph: Getty Images

Reg Platt is a Research Fellow at IPPR. He tweets as @regplatt.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.