Energy and Thatcher: a tangled legacy

Features editor

Margaret Thatcher’s influence reached across so many aspects of Britain that it’s all but impossible to summarise the legacy of her government, even if you’re confining yourself to its impact on the industrial and engineering landscape. But her legacy on the interlinked energy and environment sectors is particularly interesting.

Both sides of the environmental debate are keen to claim Thatcher as one of their own. She was, it’s said, the first major politician to bring climate change to prominence as a global issue; she made speeches on the subject to the Royal Society in 1988 and to the United Nations General Assembly the following year; surprisingly, she even acknowledged in these speeches that the free market ‘would defeat its object’ if it did more damage to quality of life through pollution than it could improve it through providing goods and services.

It’s been said that Thatcher’s opinions on this were shaped by her background as an industrial chemist and her ability to read research papers, but frankly this seems to be as much of a myth as her contribution towards developing Mr Whippy ice-cream (though hot, rather than cold).

Climate sceptics point out that Thatcher later changed her mind — surely one of the few times this happened — and in her 2002 autobiography said that she now doubted global warming. But by that point she’d been out of office more than a decade, her party had been out of government for five years, and her influence on policy had waned altogether.

Thatcher acknowledged that the free market ‘would defeat its object’ if it did more damage to quality of life through pollution than it could improve it through providing goods and services

Thatcher dominated her party so much that it’s difficult to separate her opinions and policies from those of her governments. But she did take some action on the environmental front. At the time, ozone depletion was seen as a more pressing concern than emissions-induced climate change, and Thatcher signed the UK up to the Montreal Protocol, the treaty which reduced and eventually banned chlorofluorocarbons and related compounds. She also created the Hadley Centre for Climate Change at the Met Office, which opened in 1990.

What she doesn’t appear to have done is to make any policy specifically to tackle climate change. The 1986 energy act — which paved the way for privatisation of the electricity sector — brought in a commitment to reduce the amount of fossil fuels burned, but this was presented in terms of energy efficiency and money saving. She brought in the Non-Fossil Fuel Energy Obligation, which forced electricity distributors to buy power from non-carbon emitting sources. This later became the Renewables Obligation, but its original intention was to subsidise the nuclear sector, not renewables. Moreover, the economy in the 1980s was underpinned by the revenues from North Sea oil and gas to much greater extent than it is now.

Energy politics was of course extremely significant during the Thatcher era, but the miners’ strike had nothing to do with the carbon emissions from coal, even though it contributed to the later ‘dash for gas’. It’s hard to see whether diversity of energy supply even figured in ’80s Tory energy policy; Thatcher was a strong proponent of nuclear power, proposing early in her premiership to build a nuclear station every year for ten years; but in the event, only one was built, Sizewell B. The other big nuclear project of the Thatcher years, the Thermal Oxide Reprocessing Plant (THORP) at Sellafield, was actually started under the previous Labour government, and wasn’t completed until the Labour party regained power.

The nuclear sector had to be separated from the rest of the Central Electricity Generating Board before it could be privatised, because the costs of decommissioning older nuclear plants made it an unattractive investment. The subsequent privatisation, of course, was what led to all of the UK’s electricity generation capacity now being owned by European companies; I doubt whether Thatcher would approve of that, considering her famous draping of a hanky over the British Airways tailfin design that did away with the Union Flag and her equally famous antipathy to Europe.

The non-appearance of a new nuclear generating fleet in the ’80s might actually give us a clue as to what Thatcher’s legacy actually was to the UK energy industry. Nuclear plants weren’t built because of their cost: they were in competition with cheaper forms of generation, using gas. Energy policy today regards price competition and limiting of carbon emissions as less important than diversity of supply — nuclear plants are to be built despite their being more expensive than fossil fuel-burning ones — but the feeling that all energy sources are in competition with each other still persists, as we can see from comments that the government ‘is putting all its faith in nuclear when it should be building renewables’ or ‘is building useless windmills when it should be looking to nuclear’. And back-bench Tories of the more Thatcherite persuasion frequently call for price to be the only determinant of energy policy.

Margaret Thatcher famously valued competition far above cooperation — it’s perhaps the defining aspect of her politics. It’s not a huge leap, I think, to see the foreign ownership of UK energy and the continuing scrap over energy generation technologies as a continuing manifestation of that outlook.

• I’d like to thank Declan Curran of HomeFix Direct for his help in preparing this article