The nights are getting longer the days are drawing in, that means its time for … yes … the Chancellor’s Autumn Statement!
The news, whilst good on some fronts (jobs and growth) was extremely bad for the jewel in the crown, deficit reduction. The past nigh on five years of pain has delivered us less than half way to the goal of eliminating the structural deficit. So what is the Conservative plan for the next five years? Accelerated cutting, a further 21% on average in non-ring-fenced departments. The Economist thought that the sums didn’t add up (“Check your sums, guys”). Better they thought to exempt investment spending from the target reductions, that would both obviate the need for about £28billion of cuts. Also investment spending is a special case, in that it often pays for itself, by producing assets that contribute to growth. Whilst there does appear to be more money for roads and flood defences, one area was again overlooked – power generation.
This may well be a critical misjudgment by the Chancellor because the generation gap has closed to an unacceptable degree. Nine of the UK's fossil fuel power stations are due to close by 2015 under European directives aimed at reducing pollutants. In addition, nine of the UK’s ten existing nuclear power stations are scheduled to close by 2023. In our generation, the lights have never been closer to going out.
Hence it is more than disappointing that the Chancellor missed his last opportunity to announce support for a project that would substantially reduce that risk, the Severn estuary tidal barrage. Yes, it divides opinion on the environmental effects but there is a bigger game here, if the lights do go out the UK will lose many billions in lost production, many times the cost of the entire project.
As Prima Facie always maintains, prevention is always better than attempted cure and the Chancellor may come to rue his lack of ambition. The National Infrastructure Plan 2014, published ahead of the Autumn Statement, indicates that in relation to the Swansea Tidal Lagoon [a much smaller project] “the government will start closer discussions with Tidal Lagoon Power Ltd to establish whether a potential tidal lagoon project at Swansea Bay is affordable and value for money for consumers”. So more talk then…