GB Energy a 'white elephant'? Why Scotland needs this state intervention to work

Governments can lose badly if they try to stand against the power of the free market but they can and should act as a powerful player within it

In an interview we publish today, Shadow Scotland Secretary Andrew Bowie suggests Labour’s publicly owned company GB Energy may turn out to be a “white elephant” or a “gimmick”.

He is right to be sceptical, given the many false hopes raised in the fight against climate change, efforts to build a world-leading renewable energy industry, and talk of a “just transition” for oil and gas workers. Just ask the workers at Grangemouth oil refinery, set to close next year. Where are the high-quality, well-paid green jobs to replace those being lost?

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However, cynicism has never built anything. Bowie’s claim that “we don’t need GB Energy” was strange, given that, as he pointed out, we know so little about how it will work.

The UK may be home to the biggest offshore windfarms in the world, as he stressed, but much of the infrastructure was built overseas. While we may have halved our carbon emissions faster than any other G7 nation, another of his points, there is still much to do if the UK is to reach net zero by 2050.

Bowie also expressed concern about GB Energy interfering in the market. And there can be problems when governments try to do this.

Some may remember Black Wednesday in 1992, a financial crisis caused by the UK Government’s foolish attempt to resist the raw power of the free market. However, if its guiding hand isn’t leading us in the right direction, democratically elected politicians can and should give it a shove.

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For various reasons, traditional energy companies have been slow to embrace the coming changes and the need to move to net zero. GB Energy, which will have an investment role, could potentially tip the balance and, in doing so, effectively harness market power to that end.

Keir Starmer visits the St Fergus Gas Terminal near Peterhead last year (Picture: Jeff J Mitchell)Keir Starmer visits the St Fergus Gas Terminal near Peterhead last year (Picture: Jeff J Mitchell)
Keir Starmer visits the St Fergus Gas Terminal near Peterhead last year (Picture: Jeff J Mitchell) | Getty Images

Transforming our economy to net zero is a monumental task that will only be achieved by a whole-society effort as expressed through the free market, which is basically people power in action.

GB Energy could become a white elephant, but all involved, in politics, private business or elsewhere, should at least try to make it work. Scotland’s future prosperity may depend upon it.

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