10:17 pm - February 24, 2025
During Keir Starmer’s visit to the UK National Nuclear Laboratory in Preston, the Bank of England delivered a series of sobering economic updates. It halved its 2025 growth forecast, cut interest rates for the third time in six months, and warned of rising inflation. Additionally, it highlighted that the national insurance hike on employers would have a more significant impact on prices and jobs than initially anticipated. These developments posed a direct challenge to the prime minister and chancellor, who have placed economic growth at the core of their strategy. The situation was made even more difficult by recent budget decisions that, in the short term, have exacerbated the economic challenges. Rachel Reeves, the Labour Party’s shadow chancellor, responded by expressing her dissatisfaction with the current growth rate, underscoring the mounting pressure on the government to deliver.
Keir Starmer, during his visit to Preston, emphasized the potential of small modular reactors (SMRs) as a way to accelerate the rollout of new nuclear power stations in England and Wales. He highlighted the advantages of SMRs, which can be built faster than traditional larger reactors, as a key component of the government’s nuclear energy strategy. The government aims to have the first SMR operational by 2032, signaling its commitment to expanding nuclear power as part of its energy mix. Starmer’s focus on nuclear energy reflects a broader push to streamline the planning system and remove obstacles to infrastructure development, a theme that has become central to his premiership. He has adopted a mantra of “build baby build,” echoing former U.S. President Donald Trump’s approach to infrastructure development, as he seeks to overcome what he sees as “blockers” to progress.
However, the challenge of balancing economic growth with environmental concerns has become increasingly evident. The government’s decision to press ahead with a third runway at Heathrow Airport, despite fierce opposition from environmental groups, highlights this tension. Furthermore, Starmer has indicated his support for approving a major new oilfield in the North Sea, known as the Rosebank development, which has been blocked by courts due to environmental concerns. When asked about the project, the prime minister suggested that oil and gas will remain a significant part of the energy mix for decades to come, even as the country transitions to cleaner energy sources. This approach has put him at odds with environmentalists, both within and outside his party, who argue that such decisions undermine the UK’s climate goals.
The conflict between growth and green policies has created internal tensions within the Labour Party. Climate Secretary Ed Miliband has been a vocal critic of the Rosebank project, describing it as “climate vandalism” when the licence was first granted by the previous government. Meanwhile, the Labour Party’s 2019 manifesto pledged to issue no new oil and gas licences, a commitment that some argue is now being betrayed. This has sparked fears of a backlash from Labour supporters and activists, with some warning that the decision could alienate voters and even lead to splits within the party. An article on the Labour List website recently cautioned that approving the Rosebank development could “implode the party,” reflecting the depth of feeling on this issue.
Despite these challenges, the prime minister appears determined to prioritize economic growth, even if it means confronting environmentalists within his own party. The government’s economic strategy is increasingly focused on overcoming obstacles to development, whether they are environmental concerns, regulatory hurdles, or political opposition. Starmer has made it clear that he is prepared to take on “zealots” who stand in the way of progress, both outside and within his party. However, this approach carries significant risks, including the potential for public rows and cabinet splits. The stakes are high, as the success of Starmer’s premiership is closely tied to his ability to deliver economic growth and restore public confidence in the government.
In conclusion, the prime minister and his chancellor are navigating a treacherous landscape, where the need for economic growth often conflicts with environmental and climate goals. While nuclear energy may offer a path where growth and green policies can align, decisions on projects like the Rosebank oilfield and the Heathrow runway expansion have exposed deep divisions. As the government struggles to stimulate growth, it is clear that difficult choices will have to be made. For Starmer, the calculation is straightforward: without economic growth, his entire project risks collapse. But as he presses ahead with controversial decisions, he must also contend with the fallout from environmentalists, activists, and potentially even his own party. The coming months will reveal whether this strategy pays off or proves to be a costly miscalculation.