Britain could be beset by levels of economic chaos last seen under Liz Truss if a Reform UK government were to fulfil its promise to strip renewable energy projects of subsidy contracts, according to the industry’s chief lobbyist.
The anti-renewables policy put forward by Nigel Farage’s populist party would severely undermine investor confidence in the energy industry and across the wider UK economy, the new chief executive of RenewableUK said.
“The signal this would send to the entire investor community would be really damaging,” said Tara Singh, a former energy adviser to David Cameron.
Before the upcoming elections to the Scottish and Welsh parliaments and councils across England, Singh said the policy threatened to push up the cost of building new infrastructure across the economy if investors lose faith in a would-be government’s economic agenda.
“We’ve all lived through a Liz Truss era, and I don’t think this is something that we would want to go back to,” she said.
Reform UK’s deputy leader, Richard Tice, gave “formal notice” to large renewable energy developers last summer that it would axe any deals struck in the government’s subsidy auction if it came to power.
In a letter sent to energy companies, Tice said the “political consensus that has sheltered your industry for nearly two decades is fracturing” and the party would “seek to strike down all contracts” if it formed a government.
Although the industry reaction was initially sanguine, concerns over a Reform UK government have deepened in recent months as the party has triumphed in byelections.
One senior industry figure said: “What has changed is that they’re clearly positioning themselves as a force to be reckoned with, as the next government in waiting. They are absolutely preparing for government, and you can’t ignore that.
“I always say, go and look at what’s going on across the country: offshore wind operations are coming up along the coastlines and making an incredible difference to those communities because they are bringing in billions in investment and employing local people. It’s incredibly difficult to ignore the economic benefits that the industry is providing.
“If you want to generate economic growth – and I think everyone can agree on doing that – then you need to invest in infrastructure and energy security. If you strip away the political colours you find that every party wants this.”
Singh said that in addition to damaging investor confidence, Reform’s anti-renewables policy “wouldn’t save any money” because refusing to honour the industry’s watertight private law subsidy contracts would make it possible for developers to sue a Reform government to get their money back.
She said that in Spain, the decision to scrap solar subsidies after the financial crisis resulted in more than 50 international lawsuits against its government, along with reputational damage, which raised the cost of all new infrastructure by making all investments in the country riskier.
The former Shell lobbyist urged all political parties to set aside the “culture war” over Britain’s energy policy in favour of a pragmatic assessment of energy security, costs and job creation. “Everything has become so tribal,” she said. “But at the end of the day, renewable energy is just one technology, one way of producing electricity. It doesn’t have to come with an ideological label attached to it.”
Building new renewable energy projects had become cheaper than building new gas plants, even before the Middle East war caused a fossil fuel supply crisis. The industry is also expected to account for 112,000 jobs by 2030, “and many of them will be in areas which are Reform-leaning”, Singh added.
She said: “Even among conservative voters there’s a clear majority in favour of net zero. Voters do like renewables. And yes, they are worried about the cost of living, but that’s where we can all work together to take more cost out of the system. In the world that we are in today, renewables offer by far the best value.”
Tice said RenewableUK had “gaslit and misled the British people” and that his party was “calling time on their lies”.
He said: “Reform has given industry plenty of notice that we will review and scrap these unfair subsidy contracts signed under the current failed regime. British families and businesses have had enough of sky-high bills to subsidise intermittent power.
“We’ll deliver cheap, reliable energy instead of more virtue-signalling that damages our economy.”
