The UK government has affirmed its intention to establish the headquarters of a new energy company in Scotland, although the specific location has yet to be determined. The announcement came during the King’s Speech, where the Labour administration outlined plans for GB Energy to oversee clean power projects nationwide.

Prime Minister Sir Keir Starmer, speaking through King Charles, highlighted Scotland’s status as a global leader in renewable energy and confirmed that GB Energy would be based there. Chancellor of the Duchy of Lancaster Pat McFadden indicated that further details about GB Energy, including its headquarters, would be forthcoming as plans develop.

While emphasizing the government’s desire for swift action, McFadden acknowledged that the final decision on the headquarters location is still pending. Prime Minister Starmer has underscored the company’s role in driving the clean energy transition and bringing a substantial number of skilled jobs to Scotland.

In documents released alongside the King’s Speech, the UK government outlined that GB Energy would receive £8.3 billion in public funding over the parliamentary term, with additional private sector investments crucial for developing a decarbonized power system. The firm’s mandate includes facilitating, encouraging, and participating in the production, distribution, storage, and supply of clean energy.

GB Energy’s role does not involve supplying power directly to homes but focuses on supporting existing and new clean technologies, alongside collaborating with local communities to foster small and medium-sized renewable projects. King Charles emphasized that the legislation would contribute to achieving energy independence and stimulating investments in energy infrastructure.

Additionally, the establishment of a Council of the Nations and Regions was confirmed to renew collaborative opportunities among the Prime Minister, heads of devolved governments, and mayors. Other measures announced in the King’s Speech applicable to Scotland encompass reforms in workers’ rights, changes in border security, a phased prohibition on smoking, and the discontinuation of VAT exemptions for private schools.

Mr. McFadden, the Member of Parliament for Wolverhampton South East and a former aide to ex-Prime Minister Tony Blair, expressed enthusiasm for GB Energy, describing it as a “huge opportunity.” Speaking on BBC Radio’s Good Morning Scotland, he highlighted the benefits of having the company’s headquarters in Scotland, although he noted that the exact location would be announced in due course.

Initially introduced by Labour in 2022, GB Energy was proposed as a “publicly-owned clean energy generation company,” akin to Sweden’s Vattenfall or Denmark’s Orsted. However, subsequent statements from Sir Keir Starmer indicated that it would function more as an “investment vehicle” rather than focusing solely on energy production.

Trade unions have called for clearer details about the plans surrounding GB Energy. Mr. McFadden, who also served as Labour’s national campaign coordinator during the election, was also queried about his party’s stance on the North Sea oil and gas industry.

Labour has affirmed its decision not to issue new oil and gas licenses, opting instead to extend the windfall tax on energy companies, a move criticized by OEUK for its potential impact on jobs. However, the party has committed to maintaining existing licenses and acknowledges that oil and gas will remain integral to the energy mix for decades to come.

“We will continue drilling for oil and gas in the North Sea for the foreseeable future,” stated McFadden. “There is an established industry with existing licenses already in place.”

Prior to the King’s Speech, Labour faced calls to eliminate the two-child benefit cap, introduced under Conservative austerity measures in 2017, which prevents parents from claiming universal credit or child tax credit for a third child, with some exceptions.

The Child Poverty Action Group in Scotland estimates that abolishing the cap, costing an estimated £1.3 billion, would lift 250,000 children in the UK out of poverty, including up to 15,000 in Scotland. When asked about the potential harm caused by the cap, Mr. McFadden commented that it was a topic “open to debate.”

Sir Keir has stated that a Labour government would not alter this policy, emphasizing the need to prioritize economic growth before committing additional funds to benefits. Scottish Labour leader Anas Sarwar has expressed his intention to urge Sir Keir to reconsider the policy should Labour come to power.

Mr. McFadden acknowledged the calls for the policy’s abolition, noting that the focus of the King’s Speech was on “the changes outlined in our manifesto, which did not include this particular policy.”

SNP Westminster leader Stephen Flynn has announced his party’s intention to propose an amendment to the King’s Speech aimed at ending the two-child cap. He criticized Mr. McFadden’s dismissal of the policy’s harmful effects as “extraordinary,” urging Labour to take action. Flynn argued that the UK government possesses the fiscal tools to generate tens of billions of pounds, more than sufficient to cover the costs of abolishing the cap.

When questioned about why the SNP government hadn’t mitigated the policy’s impact in Scotland, Flynn pointed to the introduction of the Scottish Child Payment but noted that Scotland’s financial flexibility was severely limited by Westminster. He emphasized that any further mitigation would come at the expense of crucial services like healthcare, education, and policing in Scotland.

Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine, and shadow minister for veterans affairs, defended the two-child cap as a measure aimed at ensuring fairness. Bowie argued that tough decisions were necessary due to the escalating welfare budget. Regarding Labour’s stance on the policy, Bowie expressed hope that they would maintain it, highlighting its significant savings for the exchequer while continuing to support those in need.

Bowie also criticized Labour for what he perceived as a lack of clarity during the election campaign regarding the purpose of GB Energy. He emphasized the importance of understanding the organization’s role and location, expressing concern that it might amount to little more than a “glorified call centre.”