Three Big Ideas #4
The demise of coal, priorities for growth, and letting a thousand Beatles bloom
Welcome to our weekly Three Big Ideas roundup, in which we serve up a curated selection of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team – and today for the first time, with a guest contribution!
🪨 Eamonn Ives, Research Director
The year is 1882 – Queen Victoria marks her 45th year as reigning monarch, William Gladstone is enjoying his second of four terms in Downing Street, and, at 57 Holborn Viaduct in London, the world’s first coal-fired power station is sputtering into life. One hundred forty-two years – and 4.6 billion tonnes of coal – later, no more electricity will ever be generated from the dirty fossil fuel in Britain again. At 3pm on Monday 30th September, the last remaining coal-fired power station, Ratcliffe-on-Soar, was desynced from the grid.
Different reasons explain the demise of coal in Britain. There was legislative pressure, which placed limits on how polluting power stations could be – limits which coal struggled to comply with. Meanwhile, the rise of renewables ensured there were alternative ways to generate the electricity consumers demanded. But perhaps the killer reason was price. From 2013, a carbon price has been applied to the power sector, which levies a tax per tonne of carbon dioxide generated. Coal-fired power stations became increasingly uneconomical – going from producing 40% of Britain’s electricity in 2012 to just 10% in 2016.
Economists have long advocated the use of price signals as a way to efficiently and effectively achieve policy objectives. Britain’s rapid transition away from coal seems to vindicate them pretty comprehensively. As we look towards cracking other stubborn issues – from congested roads to decarbonising agriculture – the current government should be minded to learn the lessons of the past, recognise the power of prices to incentivise desired outcomes.
📊 David Lawrence, Co-Director, UK Day One
Keir Starmer says his new government’s ‘number one’ priority is growth. We at UK Day One wanted to take him at his word, so we asked 44 pro-growth economists, think tankers and experts to share their views on what Labour’s priorities should be.
Far at the top of the list was planning reform. However, respondents largely insisted that the growth impact will depend on building housing and infrastructure in or near existing areas of high productivity, particularly London and the Southeast.
Following this was investment in nuclear energy, to bring down energy costs. These are viewed by some as the main driver of Europe’s economic ills vis à vis the US, and bolstering electricity supply is particularly important given rising demand for electricity arising from heat pumps, electric vehicles and AI data centres. Nuclear is also favoured due to its supply of continuous baseload power, which is essential for industry. Interestingly, respondents were more divided about whether the UK should increase investment in non-nuclear renewable energy – and the UK’s ‘green tech potential’ was generally deemed ‘highly overrated’, despite the current government’s prioritisation of green jobs.
In what will surprise some, another idea that was viewed as ‘overrated’ was access to capital for startups. Where capital is in short supply, as one respondent put it, is more because of “underlying issues making it difficult to create profitable opportunities here with which to generate returns.” Fixing these could prove to be more effective than tinkering with pensions reforms.
With the Budget just three weeks away, Rachel Reeves’ first meaningful opportunity to shape Britain’s economy is fast approaching. Our survey findings – which you can read in full here – provide a plan for her to build on.
💫 Philip Salter, Founder
“[W]e should be taking more chances on quite young people, giving them more authority,” Tyler Cowen declares on the excellent Institute for Progress’ Metascience 101 podcast, the latest episode of which looks at how to better fund scientific innovation.
Tyler adds, “when you think of young people running things – well, who ran the Beatles? There was George Martin and Brian Epstein, but the Beatles ran the Beatles. Paul McCartney had to figure out the recording studio. We don’t call that science, but that was an extremely difficult scientific project that had never been done before. And this guy, who hadn’t gone to college, at age 23 starts figuring it out and becomes a master.”
It’s not just music. The next generation can bring a fresh approach to tackling the world’s most pressing problems, something we’ve consistently argued for at The Entrepreneurs Network. And, as with musicians, though not everyone will become great, a great entrepreneur can come from anywhere (to misquote Anton Ego in Ratatouille). That’s why we’re supportive of organisations like the Junior Achievement, VIVITA, Young Enterprise and the Prince’s Trust who aim to imbue young people with the skills to lead.
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