Posted by

Tom Nolan, Policy Adviser

23 Aug 2012

One of the first major energy related decisions that faced the Coalition when they came to power was whether or not to support the construction of a barrage across the Severn Estuary. Despite the strong argument presented by supporters it was decided, on cost grounds, that the government couldn’t give it the go-ahead.

Although this was a major setback the backers didn’t abandon the scheme but went away and improved the proposal. According to various recent reports a fresh proposal has been put to the Prime Minister. Whilst refraining from giving the proposal his full backing the PM has asked Oliver Letwin, his policy chief, and Ed Davey, the energy secretary, to reconsider the revised proposal.

There are to be two reasons why the government have been willing to change their views. The first is over who is going to pay for the barrage. At an estimated cost of £30 billion it would represent one of the most expensive projects ever undertaken in the UK – dwarfing many previous infrastructure projects. It would even make the cost for the Olympics look small in comparison! But the backers of the barrage are confident that the cost will be met by sovereign wealth funds. Without having to pay for the scheme it is easy to see why the government might be keener this time around.

The second reason is the state of the economy at present. Economic boosts that major infrastructure projects deliver are well established. And the potential benefits the construction of a barrage will give the UK, in both the short and long term, are huge. It is expected to create 20,000 jobs in construction and another 30,000 in activity around the barrage.

But arguable it strongest argument is the impact it will have on future energy security. Once completed it will supply 5% of the UK electricity needs and it will be operational for up to 120 years. Unless major action is taken now energy security will become a huge challenge for the UK in the coming years. Support for the Severn Barrage might just be the type of action needed to ensure the UK won’t ever have to worry about the lights going out.

There will undoubtedly be vocal opponents to the scheme, as there always is with any large scale infrastructure project (HS2 one recent example). While the government are right to carefully consider the project before making a decision they shouldn’t delay for too long. A scheme such as the barrage is needed now and despite the funding coming from the private sector it cannot be built without government support.