As the Chancellor gears up to deliver the Autumn Budget next week, let’s look behind the headlines at the reality of what is going on with the UK’s economy and lack of growth. Despite what the current government argues (not very different from the previous incumbents), the UK’s economic stagnation is not so much due to a lack of new infrastructure projects or excessive regulation, but rather the chronic failure to maintain existing assets. Essential networks—such as railways, roads, water systems, and mobile connectivity—are in poor condition, creating inefficiencies and costs that ripple through the economy. Instead of prioritising glamorous projects like HS2, the focus should be on ensuring that current systems actually work. Well-maintained infrastructure provides resilience and reduces the disproportionate costs of failures, making it a cornerstone for productivity and growth. This is not a technical challenge but a matter of political priorities and regulatory focus.
Current fiscal rules and political incentives distort spending decisions. The government re-labels maintenance as “investment” to justify borrowing, shifting costs to future generations and encouraging flashy enhancements over essential upkeep. True maintenance should be funded on a pay-as-you-go basis through current bills, ensuring intergenerational fairness and system reliability. Capital maintenance comes first, second, and third, with new projects only after existing infrastructure is robust.
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As the Chancellor gears up to deliver the Autumn Budget next week, let’s look behind the headlines at the reality of what is going on with the UK’s economy and lack of growth. Despite what the current government argues (not very different from the previous incumbents), the UK’s economic stagnation is not so much due to a lack of new infrastructure projects or excessive regulation, but rather the chronic failure to maintain existing assets. Essential networks—such as railways, roads, water systems, and mobile connectivity—are in poor condition, creating inefficiencies and costs that ripple through the economy. Instead of prioritising glamorous projects like HS2, the focus should be on ensuring that current systems actually work. Well-maintained infrastructure provides resilience and reduces the disproportionate costs of failures, making it a cornerstone for productivity and growth. This is not a technical challenge but a matter of political priorities and regulatory focus.
Current fiscal rules and political incentives distort spending decisions. The government re-labels maintenance as “investment” to justify borrowing, shifting costs to future generations and encouraging flashy enhancements over essential upkeep. True maintenance should be funded on a pay-as-you-go basis through current bills, ensuring intergenerational fairness and system reliability. Capital maintenance comes first, second, and third, with new projects only after existing infrastructure is robust.
Why electricity prices are so high and why renewables are not cheap
Helm Talks - energy climate infrastructure & more
15 minutes 28 seconds
3 months ago
Why electricity prices are so high and why renewables are not cheap
Why when solar and wind are supposed to be nine times cheaper than gas are electricity prices in the UK amongst the highest in the world? Why when the UK is supposed to be a fast track to this promised cheap net zero electricity by 2030 are large industrial users struggling? Why is Grangemouth in trouble? Why is the steel industry in such bad shape that it has be bailed out and nationalised? Why have fertiliser and petrochemical companies and now biofuels all reached for the exit? The UK’s dash for renewables is supposed to be creating a clean-energy superpower, based upon “home-grown” energy, whereas in fact almost all of the supply chain is imported.
Renewables are not cheap when their system costs are properly measured. Marginal costs might be near zero, but a renewables-based system already needs almost twice the capacity as the old coal plus gas plus nuclear system, even though demand has fallen. To produce roughly the same amount of firm power, a renewables-based system already requires lots of new transmission lines, which were not needed in the past for the same demand, as well as a host of upgrades. It requires batteries and storage and lots of back-up gas standing mostly idle, as well relying heavily on imported electricity via the interconnectors to keep the lights on. Renewables are not like-for-like and the wholesale price for firm power should not be compared with the contract for differences (CfD) price for intermittent generation. The nine times cheaper claim relies on leaving almost all the relevant costs out of the comparison.
It's time for some energy and climate realism and some honesty about the costs and consequences of the net zero 2030 target.
Helm Talks - energy climate infrastructure & more
As the Chancellor gears up to deliver the Autumn Budget next week, let’s look behind the headlines at the reality of what is going on with the UK’s economy and lack of growth. Despite what the current government argues (not very different from the previous incumbents), the UK’s economic stagnation is not so much due to a lack of new infrastructure projects or excessive regulation, but rather the chronic failure to maintain existing assets. Essential networks—such as railways, roads, water systems, and mobile connectivity—are in poor condition, creating inefficiencies and costs that ripple through the economy. Instead of prioritising glamorous projects like HS2, the focus should be on ensuring that current systems actually work. Well-maintained infrastructure provides resilience and reduces the disproportionate costs of failures, making it a cornerstone for productivity and growth. This is not a technical challenge but a matter of political priorities and regulatory focus.
Current fiscal rules and political incentives distort spending decisions. The government re-labels maintenance as “investment” to justify borrowing, shifting costs to future generations and encouraging flashy enhancements over essential upkeep. True maintenance should be funded on a pay-as-you-go basis through current bills, ensuring intergenerational fairness and system reliability. Capital maintenance comes first, second, and third, with new projects only after existing infrastructure is robust.
