The Race for Energy

Access to power will determine the global scramble for security and growth

Towering Columns

In The Telegraph, David Johnston announced the formation of Conservative Networks, a forum for connecting MPs with the wider party and developing a non-factional platform for rebuilding.

I’m bringing people from across the parliamentary party and broader Conservative family together to launch Conservative Networks, an organisation to build networks of people and organisations that want to see Conservative governments elected – Conservative governments that do the things they expect them to…

…We already have lots of great think tanks on the centre-Right and there’s no need to create another one. But the people in the networks created will give the shadow cabinet focused, practical policy suggestions based on what is happening in their fields of expertise. However, right now, the most important thing we need is not the policies to write a new manifesto, but to spend time listening to people about why they lost faith in us and how we can restore it.

With only 121 MPs at present, a lot of the parliamentary party’s capacity is going to be taken up by activity in parliament, so Conservative Networks will help ensure it can stay properly connected to the world beyond Westminster. Importantly, we will not be associated with any particular wing of the party or any leadership candidate past or present as factionalism is one of the factors that has meant we’ve lost support. All of the candidates to be next leader of the Conservative Party have been briefed privately and expressed support for what we’ll be doing and on our parliamentary board and advisory group we will have people from all parts of the party – recognising that we all need to take the fight to Labour, not each other.

In The Times, Juliet Samuel says Labour is blindly refusing to recognise the trade-offs involved in accelerating towards Net Zero.

Gary Smith, head of GMB union, has had enough. In a packed event [at the Labour Party conference] in Liverpool hosted by The Spectator on Tuesday, Smith tore into the new government’s energy plans. The target to make our electricity carbon neutral by 2030 is totally unachievable, he argued, and its reckless pursuit is simply accelerating deindustrialisation and mass lay-offs. There aren’t enough cable-makers to make the wires, for one thing, or enough engineers to install and maintain them, and people aren’t going to turn off their kettles at peak times for a fiver. As for renewables, he was scathing, portraying a sector that lobbies for bill-payers to fund it, makes its kit cheaply overseas using slave labour, imports it all into Britain, loads intermittency costs on to the grid, and keeps all the jobs and profits abroad. In short: “What an industry!”

…Just a day before, Rachel Reeves had been enjoying her own little circle of praise at Labour’s “business day” — a love-in between lobbyists and ministers that is apparently necessary if you are going to whack up taxes and make it harder to fire people. During a conversation on stage with Karen Blackett, a marketing honcho, Reeves was keen to talk about how she had “smashed the glass ceiling” for women in politics (does anybody else remember a woman from the 1980s called Margaret something?) and emphasise her interest in the “Invest in Women Taskforce”. Then Blackett said: “I want to talk about Britain as a brand … Obviously, nations can be thought of as brands.” Instead of pointing out that a nation is in fact the opposite of a brand, which exists to make profits and can be abandoned when it’s damaged, Reeves extemporised upon the idea that, now the Tories were gone, Britain could finally improve its position in some international ranking of brands and “stand tall in the world”.

All of this is glossy nonsense. If Labour succeeds, it will not be because its ministers are just more sensible and cleverer than the Tories. It will be because it identifies the true points of neglect and weakness in our country and ruthlessly orients policy towards addressing them. To do that, however, the government must be honest about which groups of people it is serving and why. The past ten years, I would suggest, make clear that large chunks of Britain’s lower-middle and working classes have been ill-served by our economic model, investment decisions, education system and immigration policy. Instead, policy has been determined in line with the interests and values of the urban, professional and civil service classes. The problem with Starmer and his government of patient saints is that, however heroically he clawed his way out of his father’s toolshed using only a flute and a human rights textbook, the professional class is the one to which he and most of his ministers belong and whose prejudices they share. If he is to get anything done, he must bring his lofty technocracy down to the sordid level of arguing with interest groups and working out which ones to serve and how.

On his Substack, Neil O’Brien questions the “unilateral economic disarmament” represented by current UK energy policy.

In the context of an ageing society something’s got to give. At present the UK plans to cut emissions (compared to 1990) by 68% by 2030, which is more than the EU, Japan or the United States. Do we want to be ahead of the pack, rather than in it? There is a cost to this and is is two fold. First, there is a direct cost in terms of a higher cost of energy, which is spread widely through society. But there is also a second cost in terms of lost competitiveness. For example, China is currently crushing western carmakers. Unless several big things change -including, but not limited to energy - then the future is likely to belong to them.

The costs of being ahead of the pack are likely to be non-linear:

1) If we add lots more intermittent renewables very quickly we are likely to run into much higher costs than a slower pace, including costs we haven’t had to face up to so far, because we have gas to balance the grid.

2) If you are a way out ahead of the pack in terms of energy costs you lose competitiveness. The nature of markets is non linear - if you are marginally more expensive you can lose not just a marginal share, but your whole business.

The logic we have been following is wrong - others countries that are booming are not following our dramatic, world-leading decarbonisation path. Much of Europe is in nearly as bad a position as us, and Germany is being brutally deindustrialised by the cost of energy. But Europe is no longer the world. US decarbonisation has been largely about switching from coal to suddenly abundant natural gas plus improving solar. The US sees its role in inventing the energy technologies of the future, not sacrificing its future.

While we make sacrifices to be “world leaders” we are enabling China and and other countries outside Europe increasingly to dominate the future. Energy is not the only part of the story here, but allowing them to add masses of cheap polluting coal to push down prices while making our own energy expensive has given them a massive advantage. 745 million people still don’t have access to electricity, and billions more who do are desperately poor. As long as fossil fuels are marginally cheaper they will use them.

Sure, some improvements in technology come from learning-by-doing and by rolling out existing technologies. But we have underemphasised the importance of investing in research into new technologies. The billions of people who have almost nothing just won’t pay more for energy.

In The Atlantic, Oren Cass makes the case that depending on the context, tariffs can bring many benefits as well as harms.

[Many economists’] first mistake is to consider only the costs of tariffs, and not the benefits. Traditionally, an economist assessing a proposed market intervention begins by searching for a market failure, typically an “externality,” in need of correction. Pollution is the quintessential illustration. A factory owner will not consider the widespread harms of dumping pollutants in a river when deciding how much to spend on pollution controls. A policy that forces him to pay for polluting will correct this market failure—colloquially by “making it his problem.” It imposes a cost on the polluter in the pursuit of benefits for everyone else.

Tariffs address a different externality. The basic premise is that domestic production has value beyond what market prices reflect. A corporation deciding whether to close a factory in Ohio and relocate manufacturing to China, or a consumer deciding whether to stop buying a made-in-America brand in favor of cheaper imports, will probably not consider the broader importance of making things in America. To the individual actor, the logical choice is to do whatever saves the most money. But those individual decisions add up to collective economic, political, and societal harms. To the extent that tariffs combat those harms, they accordingly bring collective benefits.

Some opponents of tariffs ignore those benefits because they don’t believe that manufacturing things domestically matters. For example, Adam Posen, the president of the Peterson Institute for International Economics, has called Trump’s proposal “lunacy” and “horrifying.” But he has also dismissed concern for American manufacturing as “the general fetish for keeping white males of low education outside the cities in the powerful positions they’re in.” Similarly, Michael Strain, the head economist at the American Enterprise Institute, believes that tariffs “would be a disaster for the U.S. economy.” In his view, the United States cannot be a manufacturing center again, “and we should not want to be.”

These arguments may be internally coherent, but they are wrong. As the fallout from globalization has illustrated, manufacturing does matter. It matters for national security, ensuring both the resilience of supply chains and the capacity of the defence-industrial base. It also matters for growth. “Countries grow based on the knowledge of making things,” Ricardo Hausmann, the director of the Growth Lab at Harvard, has said. “It’s not years of schooling. It’s what are the products that you know how to make.” Manufacturing drives innovation. As the McKinsey Global Institute has noted, the manufacturing sector plays an outsize role in private research spending. When manufacturing heads offshore, entire supply chains and engineering know-how follow. The tight feedback loop between design and production, necessary to improvements in both, favours firms and workers positioned near the factory floor and near competitors, suppliers, and customers. And the rudimentary matters as well as the advanced: When Apple tried to make its high-end Mac Pro in Texas, the effort foundered on a paucity of screws. Production in the physical economy, whether manufacturing or agriculture or resource extraction, also has an outsize effect on economy-wide productivity growth. It anchors local economies in a way that personal services cannot. It preserves economic balance, so that trade is genuinely trade, instead of a lopsided exchange of cheap goods for financial assets.

In the New Statesman, Hannah Barnes says a creeping culture of censorship has captured British institutions.

As with so much of British cultural life, wars over language, speech and behaviour are US imports. But many would see the ideas underlying this new condemnatory mood as having originated in France in the 1960s and 1970s, and with thinkers such as Jacques Derrida and Michel Foucault. Everything, they said, could be deconstructed, made relative or reduced to the level of discourse; objective truth was impossible to establish. As these ideas permeated US campuses, new areas of study emerged, each striving to reveal and challenge power structures and foster social justice. But as these liberating, enquiring disciplines hardened into the orthodoxies of identity politics, they helped create a divisive, illiberal culture.

Ian Pace, professor of music at City St George’s, University of London, and founder of the London Universities’ Council for Academic Freedom, says he is “of the left”, but has become increasingly “dismayed” by this direction of travel: “Ideas of relatively objective truth and rational argument,” he said, have been abandoned, “in favour of a highly reductionist, identity-based approach”…“What is dismaying is when some try to dismiss academic freedom as a ‘right-wing culture wars’ issue,” Pace said. “This is at odds with a long tradition of the left being those who have campaigned most arduously on the subject against right-wing censors.” For free speech to become seen as a “right-wing” issue would be a disaster, agreed Skidelsky – “but it’s also a disaster for the left, because it makes them appear censorious and intolerant”.

That freedom of speech is seen as a culture-wars issue is, in part, a failure of left-leaning politicians and media, who are reluctant to discuss thorny issues because of fear of causing offence. “The only papers that will report this sort of thing are the Telegraph and the Mail,” Skidelsky said. “Of course, they do play it up for their own purposes. But there is a real problem there. One shouldn’t be afraid to talk about it just because you think you might give comfort to the wrong side.” Publishing and the arts are traditionally the vanguard of challenging ideas, but they are increasingly reluctant to give a platform to voices deemed controversial. The historian Nigel Biggar has claimed Bloomsbury cancelled his book on colonialism and paid out the contract after being told by a senior staff member that, “We consider that public feeling on the subject does not currently support the publication of the book and will reassess that next year.” Kate Clanchy and the publisher Picador “parted company” after a row in which her Orwell Prize-winning book Some Kids I Taught and What They Taught Me was accused of containing racial tropes. And Penguin faced criticism after releasing more “palatable” versions of classics by Roald Dahl in 2023, removing words such as “fat”, “mad” and “ugly”, and adding in gender-neutral terms.

In The Times, Matthew Syed says we must think clearly about who we want to win when judging the actions of enemies and allies.

Who do you want to win? As you ponder, I invite you to consider what is unfolding around you as China — an ancient and impressive civilisation now run by a totalitarian clique — knits together an axis antithetical to the forces of openness and liberty we so foolishly take for granted. Look at the connective tissue between these revisionist powers as Beijing provides Putin with dual-use weapons and Iran provides drones, as North Korea absorbs new nuclear secrets and Russia provides assistance to the Houthis, whose raison d’être is to disrupt the shipping that embodies the free exchange eulogised by Enlightenment thinkers. Even now, global shipping faces vastly increased insurance costs while detouring around the Cape of Good Hope to avoid Yemen — a deadweight loss to the whole world.

And yet still we invite China to infiltrate our institutions, we look the other way as our politicians take their cash: business as usual. Can we not see that these tyrants are projecting their power ever more boldly (look at the Wagner Group in the Sahel, China’s Belt and Road initiative, Taiwan’s precariousness) precisely because they see us as decadent. How do you think China feels when the UK bans weapons to Israel during a hot war, when President Biden can’t bring himself to call Putin’s bluff, when the multilateral institutions created by the West have been so thoroughly infiltrated they are interpreting laws in ways that represent an inversion of their founding logic?

When the US congresswoman Alexandria Ocasio-Cortez tweets that the brilliantly targeted attack on pagers by the Israel Defence Forces is a war crime, despite a stunningly low attritional ratio of innocents to combatants, while failing to condemn the thousands of rockets fired from southern Lebanon into Israel, I hope you see my point. She has drunk the propaganda, titrated into western consciousness from bots across the autocratic world, that the US is evil, Israel a colonialist oppressor, and their actions are inherently tainted. By this estimate, the Normandy landings were a violation of international humanitarian law, since innocent people died, never mind that the operation was central to the defeat of Nazism — a secular fanaticism whose psychological contours are not so very different from the fundamentalism of Hamas, Hezbollah and Isis.

Wonky Thinking

Onward published Breaking Blue: Why the Conservatives suffered a catastrophic defeat and the route back, with Focaldata and J.L. Partners - the largest post-election survey of its kind. The party suffered an unprecedented defeat, losing half its 2019 vote. But its defectors to both the Liberal Democrats and Reform UK hold conservative underlying values and could be won back, its research shows.

The Conservatives suffered a once-in-a-century loss in every direction

The Conservatives suffered a once-in-a-century loss in every direction The 2024 general election was catastrophic for the Conservative Party. It lost especially heavily due to a huge national swing against it, with half of its 2019 vote disappearing. Its coalition fragmented in all different directions - to Labour, the Liberal Democrats, Reform and to those not voting. It lost support for many reasons, including the behaviour of MPs and leaders, the failure to deliver on pledges - particularly over immigration, the health service and tax - and the impact of external shocks like the Covid pandemic and Ukraine war derailing the 2019-24 Parliament.

The swing against the Tories was across all major demographic divides - age, Brexit preference, home ownership, education level, social grade, and previous voting pattern. But due to Britain’s first past the post electoral system, some of the voters that deserted the party matter more when it comes to share of parliamentary seats.

By far the biggest defection was to Reform UK, which won nearly a quarter of 2019 Tory voters, slicing Conservative majorities and handing dozens of seats to Labour in Tory-Labour marginals. At the 2019 election the Conservatives gained two thirds of those who voted both Ukip in 2015 and Leave in 2016, but only held 10% of these voters in 2024, with 76% backing Reform. But the party has also retained just 60% of Conservative Remainers (those who backed David Cameron in 2015 and Remain in 2016). It has therefore lost significant numbers of voters on both sides of the referendum divide.

The Conservative vote collapsed in every direction. In short, everything that could go wrong did go wrong. There is not one principal factor to explain the result. After such a comprehensive defeat, it simply can’t be taken for granted that the Conservative Party will bounce back. The age of when voters are more likely to vote Conservative has risen to 64 years old. The demographic pressures require radical change. The Party faces a sink or swim moment: be honest about the result, make the right choices and there is a clear route to come back in five years. But fail to face up to the challenge and the party could easily disappear.

The party lost voters with electorally crucial “super-demographics”

Labour barely increased its vote share in this election, but its vote became hugely more efficient across constituencies. It did this in part by winning over people with demographic characteristics which are disproportionately important in a first past the post electoral system (“super-demographics”). Breaking Blue identifies these voters with a differing combination of demographic traits (voters that are older, outright home owners, Brexit-supporting, without a university degree, of C2 social grade and living in less dense constituencies) who are unusually important in deciding the result of elections, because they are so efficiently distributed across the country they have the power to influence the outcome in a large number of constituencies.

These voters with super-demographics have historically been more likely to be Conservatives, but they deserted the party in 2024 on a proportional swing - with catastrophic electoral consequences. To recover, the Conservatives must win back voters with these super-demographics. What such a recovery looks like is clear, because Labour achieved this in Scotland at the recent election where only a six point lead against the SNP produced a disproportionately good outcome. The Tory super-demographic voters were more likely to have deserted the party for either Reform UK or the Liberal Democrats, but are the most efficient place for the party to start its fight-back.

Short and long-term causes of the defeat

The short campaign in 2024 was unsuccessful for both main parties, but the local elections of May 2024 gave a clear indication that the Conservative Party was on course for a landslide defeat before the election was even called. Previous modelling suggested that the Conservatives were on course for around 160 seats in May, some 40 seats higher than the eventual 121 tally.

The campaign itself made a bade situation worse. Negative stories for the Conservatives cut through to shape voters’ behaviour, including Rishi Sunak departing D-Day early and the ‘Gamblegate’ revelations of senior Conservative aides betting on the timing of the election. Voters tended to see the campaign through Labour’s narrative framing as being about change and ending the chaos.

In the medium-term, anti-incumbency was a huge factor, with significant tactical voting by Labour and Liberal Democrat supporters to remove the Tories from office. Perceived incompetence, division, lack of delivery, broken promises from the 2019 manifesto, “Partygate”, PPE corruption scandals and the short government of Liz Truss proved lethal for the party’s poll position. Positive achievements for the party — such as the initial Covid response, the vaccine rollout and delivering Brexit all faded away in salience. After the Truss mini-budget, the poll deficit became exceptionally difficult to recover from. To regain power, the Conservatives must learn from these lessons and, first and foremost, win back trust and a reputation of economic competence.

The party’s 2019 ideological coalition broke up

Breaking Blue examines the British electorate by political values, classifying them into seven segments: Thatcherites, Christian Democrats, Right-Liberals, Social Democrats, the Traditional Left, the New Left and the Mainstream. It reveals that winning coalitions are built when one of the major two parties wins its own base (the right-leaning segments for the Conservatives, the left-leaning segments for Labour), together with a plurality of Mainstream voters and some inroads into the other side’s base.

Tony Blair, for example, carried Social Democrats, the New Left, the Traditional Left and the Mainstream, while also making inroads into economically right-wing Right-Liberals. In 2019 Boris Johnson achieved the opposite: solidifying Thatcherites, Christian Democrats and Right-Liberals, won the Mainstream, and - crucially - massively increasing his support among the Traditional Left, who have historically been Labour voting but also strongly backed Leave.

The party must build a sustainable ideological coalition

But there is a longer term challenge, too. Based on the segmentation analysis of voters going back to the 1980s in Chapter 4, we found that the 2019 Conservative coalition was ideologically broad — as all winning electoral coalitions have to be — but contained inherent tensions that would need to be managed in government. In particular, it included voter segments with either conflicting cultural or economic values.

For example, Right-Liberals (combining economically right-wing and socially liberal beliefs), largely backed Remain, but stuck with the Tories in 2019 out of opposition to Jeremy Corbyn. At the same time, Traditional Left voters (combining economically left-wing and socially conservative beliefs) lent their vote to the Conservatives over Brexit in 2019, despite historically backing Labour.

Managing to hold together this electoral coalition was a difficult proposition given that the glue of anti-Corbyn and pro-getting Brexit done was gone by 2024, but could have been possible with the right policies, successful implementation and a stronger economy. But we show how this electoral coalition disintegrated over the course of the last parliament. What happened in July 2024 was a simultaneous collapse of different voter blocs.

Therefore to build a coalition to win a majority in the future, the party must focus on rebuilding the electoral coalition of segments that helped Thatcher, Major, Cameron and Johnson to victory. This is to combine strong support amongst segments that have historically leaned right on either their economic or cultural beliefs with plurality support amongst Mainstream swing voters.

Priorities for the new leader

The Conservatives are in the midst of picking a new leader and they will have a short window to make an impression. An overwhelming theme of Breaking Blue is competence and trust. This is not only down to the scandals associated with Boris Johnson’s Government or the economic decisions of Liz Truss, which made a recovery for Rishi Sunak essentially impossible. Yet his period in government and the short election campaign failed to improve a bad situation.

Voters across all voting patterns and ideological persuasions felt let down by the last Conservative government, concluding that it had simply not delivered on its promises, with both Truss and Sunak moving away from key aspects of the 2019 mandate especially on economic policy and immigration. However valid or invalid the explanations of the pandemic or the global energy crisis may be, voters still hold the party in power responsible.

Whether it is Kemi Badenoch, James Cleverly, Robert Jenrick or Tom Tugendhat, the first thing the public will notice is whether the Conservative Party is displaying the same erratic behaviour that was widely rejected at the last election. Many of the leadership candidates have spoken about unity, but unity for unity’s sake is not enough. The next Conservative leader must demonstrate that the Conservatives are a coherent, serious political force offering a clear and differentiated message.

Immigration is, by far, the most widely cited area of policy dissatisfaction; this goes for voters across the Thatcherites, Christian Democrats, the Mainstream and the Traditional Left segments. But it is also the top priority for Reform and Liberal Democrat defectors. Those who switched to the Liberal Democrats are not, in fact, particularly liberal, but were motivated by factors such as anti-incumbency.

The NHS and public services are also major priorities, especially for the electorally important Mainstream, for Traditional Left voters and for Christian Democrats. These issues are vital for Liberal Democrat and Labour defectors and for those who did not vote. Competence and trust were huge factors across party political and segment divides.

The next Leader of the Opposition must focus initially on something akin to a classically Conservative pitch in the first instance, with the aim of winning back the super-demographics. This will be articulating that the Conservative Party is in favour of a streamlined state; that it is pro innovation, pro expanding the capacity of public services and pro immigration reform. This will also involve having to explain the lack of coherent or delivery under the last government. Lower taxes on the middle class and being tougher on crime are top-five priorities for voters who have backed the party at least once since 2015. The simultaneous desire of target voter groups for lower taxes and greater investment in public services will need to be addressed with a clear and honest position and message.

The Conservative support base is now the oldest it has ever been, with voters now only more likely to vote Conservative than Labour if they are 64 or above. It will need to address its demographic and generational “pipeline” problem by seeking to win back voters in their 40s and 50s as well as reaching out to younger voters.

Yet if it is purely a party of the past, it won’t survive. The ability of Opposition politicians to shape the debate is infamously difficult, but it must take a clear stance on the issues that matter the most to voters. The party’s voting base is the oldest it has ever been, and it must focus on winning back these older, more natural voters first. The party simply won’t have any chance of winning again until it can convince 50-64 year olds to vote Conservative again. But it must also be thinking about a pipeline for winning over younger voters, as the second stage towards heading back to office. Showing integrity and building trust with those who have abandoned the party, and with mainstream voters will be a necessary - but not sufficient - condition for returning to power.

To win again, the party must focus on Liberal Democrat and Reform defectors

The Conservatives must focus on the priorities of Liberal Democrat and Reform defectors in particular, together with those of 2019 Conservatives who did not vote in 2024. The party lost 23% of its 2019 vote to Reform, but to focus solely on Reform defectors would be a mistake - adding together every 2024 Conservative and Reform vote would still only produce 302 seats, 24 short of a majority. The party also lost 7% of its vote to the Liberal Democrats, and in electorally important seats. It must win back both Reform and Liberal Democrat switchers just to get to a hung parliament. Under first past the post, winning Labour defectors is more efficient, but they are far less likely to say they would consider voting Conservative again than those who switched to these two parties.

Some will argue these groups are fundamentally different. They are not. Liberal Democrat and Reform defectors are more similar to each other and to current Conservatives both in their political beliefs and their demographic characteristics than other supporters of their new parties. They tend to have more superdemographic markers, and they tend to be both more socially conservative and more economically right-wing. The good news is that voters who abandoned the Tories for Reform and the Liberal Democrats actually tend to have conservative values, including on immigration and crime.

Book of the Week

We recommend Prisoners of Geography: Ten maps that tell you everything you need to know about global politics by Tim Marshall. The author argues that the land we inhabit and the shape of earth is a profound determinant of the course of history.

The land on which we live has always shaped us. It has shaped the wars, the power, politics and social development of the peoples that now inhabit nearly every part of the earth. Technology may seem to overcome distances between us in both mental and physical space, but it is easy to forget that the land where we live, work and raise our children is hugely important, and that the choices of those who lead the 7.5 billion inhabitants of this planet will to some degree always be shaped by the rivers, mountains, deserts, lakes and seas that constrain us all - as they always have.

Overall there is no one geographical factor is important than any other. Mountains are no more important than rivers or jungles. In different parts of the planet, different geographical features are mong the dominant factors in determining what people can and cannot do.

Broadly speaking, geopolitics looks at the ways in which international affairs can be understood through geographical factors; not just the physical landscape - the natural barriers of mountains or connections of river networks, for example - but also climate, demographics, cultural regions and access to natural resources. Factors such as these can have an important impact on many different aspects of our civilisation, from political and military strategy to human social development, including language, trade and religion….

Quick links

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