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Offshore wind sector to boost UK GDP by 0.6 per cent by 2030

The net economic benefit to UK plc from investment in offshore wind is considerable, says Cebr

Investment in the offshore wind sector will boost the UK gross domestic product (GDP) by 0.6 per cent by 2030 and sustain 173,000 jobs, according to a new report published by the Centre for Economics and Business Research (Cebr), commissioned by wind plant developer Mainstream Renewable Power (MRP).

The report reveals that potential for UK offshore wind sector will create 45,000 jobs by 2015 and over 97,000 jobs by 2020. By 2030 with a £18.8bn boost in net exports offshore wind could plug 75 per cent of the country’s current balance of trade deficit.

Eddie O’Connor, CEO of MRP, said: 

Cebr shows that the net economic benefit to UK plc from investment in offshore wind is considerable. The foreign trade multiplier effect is of particular interest to a sector which has the potential to supply a global market. By helping the UK reduce fossil fuel imports, and by creating a new industry, offshore wind will create jobs, assist in balancing the trade deficit and boost GDP at a time of economic uncertainty.

Later this year we will publish a companion paper which will show that offshore wind is a very attractive investment to include in a diversified, low carbon generation resource portfolio.  Including a substantial amount of offshore wind will help in the achievement of the government's long-term goals to decarbonise the UK’s electricity sector by lowering risk and cost to UK consumers.

We have embarked on a once off transition to a sustainable economy. All forms of renewable energy, from solar energy to tidal energy, will contribute to delivering this transition in the UK. But offshore wind provides this country with a clear global comparative advantage, particularly when the UK government and industry will this week publish their strategy to reduce the cost of offshore wind to £100/MWh by 2020. Cebr's findings underline the importance of that strategy, and the very significant potential economic benefit that this sector will deliver to the UK.

Oliver Hogan, head of microeconomics at Cebr and principal author of the report, said:

The current economic circumstances and the competitive challenges facing the UK highlight the importance of taking actions to improve the country’s trade balance.  Such actions, by acting directly on the factor that is constraining growth, can be expected to have particularly important foreign trade multiplier impacts.

It is Cebr’s contention that, given the positive impacts on the UK's balance of trade outlined in our report, these significant multiplier impacts can be expected to derive from investment in offshore wind.

Two years ago, the Offshore Valuation Group measured the value of the UK's offshore renewable energy resource and concluded that, by 2050 - by harnessing less than a third of that resource - the UK could generate the electricity equivalent of 1bn barrels of oil a year, reduce its CO2 emissions by 1bn tonnes and create over 145,000 new jobs.

The new Cebr/MRP report looks at the economic impact of the UK’s offshore wind sector out to 2030 and explores the impact of planned investment in offshore wind electricity generating capacity in the UK.

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide