Rob Dale, founder of lobbyist Beyond2050, argues that a Burnham government could give the UK’s hydrogen sector fresh political momentum – but warns that tight public finances mean industry must make its case if funding and policy are to keep moving.
Will Andy Burnham as Prime Minister be good for the UK hydrogen industry? This article argues yes, for three reasons: current Energy Minister Ed Miliband is likely to be the next Chancellor; Burnham has a big ‘Buy British’ agenda; and he has previously backed hydrogen through his Greater Manchester hydrogen strategy.
1) Miliband as Chancellor
If appointed Chancellor, Ed Miliband should unblock some of the Treasury barriers that have been holding back progress on the hydrogen allocation rounds (HARs). The betting markets have Ed Miliband as the odds-on favourite to become Chancellor (currently 8/13, with Pat McFadden, his closest rival for the job, far behind at 5/1). It has been widely understood that the Treasury has been preventing the publication of the updated UK Hydrogen Strategy, as well as progress on and 3.
So having Miliband in No. 11 Downing Street should help get Whitehall moving again in support of the sector. More broadly, the new Chancellor will set the economic agenda for the administration. Miliband has held his position on the net zero agenda despite growing pressure from Labour backbench MPs (and several cabinet members), opposition parties, some trade unions, and large sections of the media.
Miliband’s appointment would confirm Burnham sees decarbonisation and clean energy as a central part of his “Good growth in every postcode” ambition.
2) Burnham on ‘Buy British’
Burnham will put rocket boosters up the ‘Buy British’ agenda, which should lead to growth opportunities for UK hydrogen and fuel cell manufacturers. Beyond2050 is passionate about supporting UK businesses across all the sectors we operate in – so we are excited about this part of Burnhams’ agenda.
In his speech earlier this week, the assumed incoming PM said, “For too long, public procurement has been about chasing cut-price deals around the world…We will make sure that all eligible public contracts are subject to proper social value weighting…to make sure British companies are in a better position to win these contracts.”
It is important to read this statement in the context of the upcoming Department for Energy Security and Net Zero (DESNZ) market engagement on HAR3, as well as expected Great British Energy investment for UK hydrogen and fuel cell technology manufacturers from Great British Energy’s Energy: Engineered in the UKsupply chain fund.
The Labour Party manifesto committed to “rebuild supply chains at home,” and good progress has already been made in other sectors such as defence, nuclear, and buses, and it looks likely that the new PM will put greater energy and impetus into the cause for more patriotic procurement. Developers looking to submit bids for future hydrogen funding competitions would do well to add more UK content into their plans.
3) Reindustrialisation agenda
The possibility of a low-carbon hydrogen economy sits well within Burnham’s focus on reindustrialisation. In a speech on reindustrialisation earlier this year, Burnham talked about opening up “the prospect of Greater Manchester hosting one of the first green hydrogen economies in the world”.
Greater Manchester Combined Authority’s hydrogen strategy has been in place since 2021, meaning Burnham is the only Combined Authority Mayor to have commissioned and published a hydrogen strategy for their region.
Reindustrialisation was one of the key themes of both Burnham’s victory rally speech and his economic speech in Manchester, so the UK hydrogen industry should take comfort in knowing that the new PM enters No. 10 with a sense of the need for hydrogen in this central agenda of his administration.
Reasons for caution
Does this all mean the UK hydrogen industry should be in a celebratory mood after 12+ months of frustration with the slow pace of government progress? Sadly, no. and, for DESNZ, became tighter this week when the department accepted further budget reductions to boost spending within the Defence Investment Plan.
DESNZ officials that I have spoken with have all been keen to emphasise that energy projects are not set to be “scrapped” as some media reports suggest, but there will be delays. Disappointingly, where DESNZ decide to make budget cuts won’t be confirmed until the Autumn, most likely around the time of the Budget. This leaves time and space for speculation.
If movement on the Hydrogen Strategy, HARs, and other policy and funding mechanisms doesn’t materialise in this gap, business and investor confidence could .
This is why I see the coming months as possibly the most important time for businesses to proactively engage with government since the publication of the first UK Hydrogen Strategy in 2021. Companies investing, or looking to invest, in the UK hydrogen market should offer to work collaboratively with DESNZ officials to help them make the strongest case possible internally to protect hydrogen budgets.
They should also make plans to engage with new ministers and advisers over the summer, and work with their local MPs to evidence the role of hydrogen in reindustrialisation and good growth.
Burnham will likely become Prime Minister on 20 July. The UK hydrogen industry should prepare for what could be a more favourable policy environment when Parliament returns in September.
