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The UK government has confirmed its plan to set up headquarters for a new energy company in Scotland – but has yet to decide on the location.
In the King’s Speech, it was announced that a Labor administration would create GB Energy to “own, manage and operate clean energy projects” across the UK.
Announcing Prime Minister Sir Keir Starmer’s policy agenda, King Charles said the firm would be based in Scotland, which the government has described as a “global leader in renewable energy”.
Chancellor of the Duchy of Lancaster Pat McFadden said further details of GB Energy would be confirmed in due course.
He said that while the government wants to act quickly, it has yet to make a decision on headquarters.
Prime Minister Sir Keir Starmer has pledged the firm will lead the transition to clean energy and bring “huge numbers” of skilled jobs to Scotland.
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In documents released alongside the King’s Speech, the government said GB Energy would be backed by £8.3 billion of public money in Parliament, with significant private sector investment needed to fund the decarbonised energy system.
The firm said it will “facilitate, support and participate in the generation, distribution, storage and supply of clean energy”.
GB Energy will not supply energy to homes, but is designed to help fund existing and new clean technologies and work with local communities to develop small and medium-sized renewable projects.
The king said the legislation would “help the country achieve energy independence and unlock investment in energy infrastructure.”
Sir Keir’s intention to set up a Council of Nations and Regions to “restore opportunities” for collaboration between the Prime Minister, heads of devolved government and mayors was also confirmed.
Other announcements in the King’s Speech that could affect Scotland included reforms to workers’ rights, changes to border security, a phased-out smoking ban, restrictions on vape sales and advertising, support for sustainable jet fuel production and the end of VAT exemptions for private schools.
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Mr McFadden, MP for Wolverhampton South East, who previously worked for former Prime Minister Tony Blair, told BBC Radio Good Morning Scotland that GB Energy was a “huge opportunity”.
“I think it would be great to be based in Scotland, right where we will announce it in due course,” he said.
By 2022, Labor said GB Energy would be a “publicly owned clean energy company” operating like Sweden’s Vattenfall or Denmark’s Orsted.
But in subsequent interviews, Sir Keir would refer to it as an “investment vehicle” rather than an energy company.
Unions called for more clarity on the plans.
Mr McFadden, who was Labour’s national campaign co-ordinator during the election, was also asked about his party’s policy on the North Sea oil and gas industry.
But the party pledged not to overturn existing licenses and said oil and gas would still be part of the energy mix for decades.
This policy was not mentioned in the King’s Speech.
“We will be producing oil and gas in the North Sea for some time,” McFadden said.
“There is an established industry there. There are licenses that have already been granted.”
He added: “Again, this is something we said before the election, so what you would expect our actions to be after the election should be consistent with that.”
Deputy First Minister Kate Forbes said after the King’s Speech that the Scottish Government was willing to work “constructively” with the Labor government, but called for more details on GB Energy.
She welcomed proposals to strengthen workers’ rights and take action against smoking and vaping, backing a “four countries” approach to the issue.
The SNP minister also expressed disappointment that the UK government had not committed to scrapping the two-child benefit cap, but said her government would continue to “take the case to reduce the damaging levels of child poverty we see”.
The cap, introduced as part of austerity measures under the Conservative government in 2017, prevents parents from claiming Universal Credit or Child Tax Credit for their third child, with a few exceptions.
It may be a King’s Speech – amid much royal pomp and ceremony – but today’s scene provides Sir Keir Starmer with an opportunity to show he intends to act quickly to deliver on his election promises.
And when it comes to Scotland, it is clear that the Prime Minister wants to project an image of a British government that is firmly committed to improving cross-border relations and governing the whole country.
Plans to set up GB Energy and a bill to promote sustainable jet fuel production could have a major economic impact north of the border.
The prime minister also came up with a forum where he will meet with decentralized governments – the Council of Nations and Regions. There is talk of “reinforcement” and “cooperation”, but no details yet on how this will work in practice.
The Scottish Government has welcomed respect for the devolution deal, but SNP ministers and MPs have made it clear they are prepared to hold the prime minister to the fire on issues such as workers’ rights and child poverty.
SNP Westminster leader Stephen Flynn said his party would table an amendment to the King’s Speech to end the cap.
He said it was “extraordinary” Mr McFadden refused to take action which caused the damage.
In a Commons debate, Mr Flynn said the task force would “ultimately lead to the same conclusion” as his party is proposing, and the lifting of the cap.
Sir Keir said the purpose of the taskforce was to develop a strategy to reduce child poverty levels.
Scotland’s Child Poverty Action Group said scrapping the cap, which would cost an estimated £1.3 billion a year, would lift 250,000 children out of poverty in the UK, including up to 15,000 in Scotland.
Asked repeatedly whether he agreed the cap had caused harm, Mr McFadden said it was “open to debate”.
Scottish Labor leader Anas Sarwar said he would press the Prime Minister to scrap the policy when Labor won power.
Mr McFadden said that while he understood calls for the policy to be scrapped, the King’s Speech was about “the change we talked about in our manifesto” and changing the cap “wasn’t in our manifesto”.
Mr Flynn called on Labor to “do the right thing” and argued the British government had the fiscal leverage to raise tens of billions of pounds, more than was needed to pay the cost of lifting the cap.
Asked why the SNP government had not eased the impact of the policy north of the border, he said it had already introduced the Scottish Child Payment but that Holyrood’s finances were being “hugely constrained” by Westminster.
“If we decided to water down one of their policies again, it would be at the expense of Health Scotland, the Scottish Education Service and Police Scotland,” he told Good Morning Scotland.
Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine and shadow veterans’ affairs minister, said the two-child cap brought “fairness” and urged Labor not to scrap it.
He also said Labor had failed to explain exactly what GB Energy would do during the election campaign.
Mr Bowie added: “I very much hope it’s not just a glorified call centre.”