Brexit threat to North's energy sector

IPPR North’s “The Impact of Brexit on Energy in the North of England” study claims that the EU has shielded the North against the Government‘s bias towards London and South East when it comes to research funding.

IPPR North said that a hard Brexit will threaten the northern energy sector, energy security and stable fuel prices.

It described a hard Brexit as including full withdrawal from Euratom, no deal on energy trade, and withdrawal from participation in pan-European energy research programmes.

IPPR North said that in the absence of comprehensive and deep interventionism from the Government, Euratom membership and partnership on research programmes remain vital.

The study looks at the issues facing the North’s green energy sector, which currently leads the UK and large parts of Europe in green energy. It also generates half of all the green jobs in the country.

IPPR North said the report uncovers new information highlighting the importance of pan-European cooperation in developing the North’s green energy agenda.

IPPR analysis of a breakdown of EU funding for scientific research showed that the North of England accounts for 45 per cent of the UK’s share of renewable energy research funding, more than any other region.

Previous IPPR North research has found that the Government tends to overly focus on playing it safe by investing more in London and the “golden triangle” in the south east, whereas the EU is more prepared to invest in new growth in the regions.

In a 2016 study, IPPR North found that the Government invests less by proportion than the private sector in Northern life sciences.

It said that in nuclear energy, the UK is a world leader in nuclear decommissioning - an EU market which is estimated to be worth up to 253bn euros (£230bn) over the coming decades.

By leaving Euratom, IPPR said the UK will have to develop a highly complex new regulatory system and international agreements on areas including nuclear fusion, radioactive waste and the supply and distribution of nuclear materials.

It added that the ending of free movement also risks an exodus of highly skilled nuclear scientists whose skills are in high demand internationally.

Ed Cox, director of IPPR North, said: “On energy alone, the Government’s industrial strategy will need to go from being a mere summary of current policy interventions undertaken by the Government in the economy, to one of the most detailed and interventionist plans for a modern economy in the world, if it is to replace Euratom and the decades’ worth of expertise and programmes developed through pan-European co-operation.

“As the Government has repeatedly said, leaving the EU does not mean leaving Europe, and if it looks as though Brexiteers can’t deliver on their promises, we must continue to have the closest possible relationship with our nearest neighbours on energy.”

IPPR North concluded that if industrial strategy and a more interventionist state aid approach are to replace the current EU system, it will be impossible without a radical and significant overhaul of Government intervention, regulation of key industries such as nuclear, and wholesale regional devolution.

It said that in the absence of such a programme, the risks associated with a hard Brexit including the withdrawal from Euratom are too high for such an approach to be safe, to protect industry, to meet emission reduction obligations, to keep on the lights and reduce energy bills.