Essay by Eric Worrall
“… Time to closely regulate price-gouging gas plants or take ownership of supply …”
Ed Miliband needs a plan for industry – without it, the move to net zero could ruin UK manufacturing
Phillip Inman
Sun 19 Oct 2025 02.00 AEDTManufacturing is buckling under sky-high energy bills. Time to closely regulate price-gouging gas plants or take ownership of supply
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Analysis published by the Office for National Statistics (ONS) in May charted the more recent lurch downwards in output in the UK’s energy-intensive manufacturing industries. Output at the end of 2024 was at its lowest in 35 years.
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Meanwhile, factory owners face further cost increases as they are asked to pay the extra bill for upgrading the country’s electricity grid through higher network charges. Worse, a scheme to protect the 500 most-intensive energy users from next year will be funded by all factories and businesses, making a bad situation worse for the vast majority.
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Miliband, and more importantly Reeves, seem paralysed by indecision. They need to adopt the Stonehaven report or better still, take ownership of the gas supply industry. Labour has had 18 months to decide. Without a plan, the transition to net zero could wreck the manufacturing sector.
What is the Stonehaven report? The Stonehaven report was produced by Greenpeace, and advocates imposing price controls on gas companies, to stop them from cashing in when renewable output collapses.
Power Shift: how the Labour government can bring down bills and bolster net zero by curtailing the power of gas
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Executive summary
The UK is facing an enduring energy affordability crisis that affects millions of households, undermines industrial competitiveness and slows progress on climate goals. Even though renewables are now the cheapest form of electricity generation, UK consumers and businesses continue to pay inflated electricity prices that are pegged to the extremely high and volatile price of gas.
The unaffordable gas-driven pricing of our electricity market has caused a cost of living crisis, forced the closure of many businesses and industries, and damaged our economy. Since 2021, our overreliance on gas and its volatile prices has forced the government to make £40 billion in emergency payments to help households cope with their soaring bills, after Russia’s invasion of Ukraine sent prices soaring. These inflated prices have resulted in the UK spending £90 billion more on gas than if prices had stayed the same, equivalent to £1,300 per person.
Now the Labour government has a unique opportunity to deliver an energy system that is fit for the future: providing energy security by ending reliance on fossil fuels, and unlocking cheaper renewable electricity for consumers and businesses by taking gas power out of the electricity market.
This new research by Greenpeace UK and Stonehaven outlines our recommendation to stop gas setting the price we pay for electricity and control the negative impacts of gas in the electricity market. Our recommendation is to bring gas plants into a Regulated Asset Base (RAB) system, administered by the National Energy Systems Operator (NESO). In this model, gas plants would provide a strategic reserve of energy, at an agreed price, when this is needed to meet electricity demand. This would ensure that gas plants get regular, stable returns, while keeping energy costs for the rest of the economy stable and noticeably lower.
This policy could be delivered – and start producing meaningful savings – in the next two years. Our analysis shows that it would result in annual bill savings across households and the economy of £5.1 billion in total in 2028. This represents a saving of £65 a year to the average household and £3.3 billion across all businesses and industry. Rapidly implementing our recommendation would contribute a significant amount towards the government’s vital pledge to lower household energy bills by £300 a year. Additional bills savings can be made via a range of alternative interventions, including moving policy levies into general taxation, extending the Contracts for Difference scheme to 25 years and improving energy efficiency, as outlined by E3G’s Clean Power Mission report.
As this paper shows, this is not just an energy policy – it is a social, economic and climate policy in one, enabling this Labour government to simultaneously lower bills, support vulnerable households, strengthen British industry and accelerate the clean energy transition.
Read more: https://www.greenpeace.org.uk/resources/power-shift-report/
The report claims gas plant operators would be fairly compensated based on the economic value of their assets, but given fossil fuels allegedly face imminent Net Zero enforced shutdown, that measure of “fair value” would probably be a long way from the value such assets would enjoy were they allowed to operate for their full planned life, and were not forced to withdraw from the market every time the wind blows or the sun shines.
And of course, hanging over any negotiation would be the possibility if gas plants don’t agree the plan, nod and smile, the British government could simply expropriate their assets – “take ownership of the gas supply industry”, as Britain is currently doing to the rail industry.
There is another possibility – following the electoral wipeout in the recent Welsh election, and a strong showing by the right wing climate skeptic Reform party, in one of Britain’s most left wing regions, Britain’s ruling Labour Party may be seriously considering dumping Net Zero.
Blair Institute urges Labour to reset clean energy plans in favour of ‘cheaper power 2030’
The Government is under increasing pressure to focus on lowering cost.
October 23rd 2025, 1:39 pm
Labour’s flagship clean power 2030 target is under fresh scrutiny after reports the government may quietly abandon the pledge, as a Tony Blair Institute paper urges ministers to focus instead on delivering “cheaper power 2030″.
Since taking office in 2024, Labour has embarked on a series of reforms aimed at scaling up the rollout of renewable and nuclear energy as part of its goal to phase out fossil fuels and achieve 95% decarbonised electricity in the UK grid by 2030.
Labour’s plans also include establishing GB Energy, a state-backed company intended to co-invest in clean-technology projects and support domestic supply-chain growth.
However, Labour’s decision to halt new North Sea oil and gas licensing and maintain a higher windfall levy has drawn criticism from the industry, which warns the policy risks undermining investment and jobs.
Amid growing pressure from the offshore sector, The Guardian reports that Labour ministers are considering a rethink of their energy strategy in an effort to counter the rise of Reform UK.
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Who could have imagined former Prime Minister Tony Blair might emerge as a voice of reason in the British energy debate? Of course, Blair doesn’t advocate ditching Net Zero, he just wants to adjust the timeframe a little.
There is more at stake than Britain’s manufacturing sector. One of the other crown jewels of Britain’s economy, the London Banking sector, is also threatened by expensive energy. As AI driven financial trading becomes more of a thing, Britain’s Banking sector increasingly needs access to vast amounts of cheap energy to compete with other major trading centers. Banking directly contributes just under 5% to British government revenue, likely a lot more when you consider the constellation of service industries which support the banking sector. Unlike manufacturing, bankers can relocate by hopping on an airplane Fridan night, and be ready to continue trading the following Monday at already operational overseas trading centers. If the British Government loses the revenue it receives from the banking sector, it’s game over for the British economy.
Agriculture is also in trouble – between the rewilding craze, which aims to remove access to vast tracts of land and give them over to weeds, to punitive attacks on the use of agricultural chemicals and fertilisers, Britain will be lucky to have any food production left by the middle of this century.
Time is short. British manufacturing is enduring a sharp contraction, high revenue mobile industries like banking must be weighing up their options, and Agriculture is clinging on by their fingernails. Every moment the British government hesitates to follow President Trump’s example and ditch Net Zero adds to the risk the British economy will suffer a catastrophic economic collapse, which might take decades or even centuries to reverse.
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