At every turning point in modern history, Britain has understood that growth comes from two things – cheap, abundant energy and economic freedom.
And now an AI technological revolution is transforming our economy, sciences and public services.
And here in Britain we have so many advantages for this race.
But there is an obvious, energy-shaped elephant in the room.
Our electricity prices are too high. Our system is too slow. And we are simply not acting with the urgency this moment demands.
Two years ago I made a speech saying we would need more energy for AI – setting out the largest expansion of nuclear power in seventy years, and arguing for more gas power plants to build up our 24/7 baseload power.
Since then, I have argued time and again, that our priority has to be to make electricity cheap.
That argument seems to be catching on, but nowhere near quickly enough.
We need to make our electricity as cheap as possible, as quickly as possible – whether that be for growth, for living standards or for electrification.
There are some on the right who think that all clean tech is stupid. I'm not one of those people.
There are many consumers who enjoy their heat pumps, home batteries and their electric cars. But consumer choice and cheap electricity should be king.
We Conservatives have already set out a Cheap Power Plan – taking non-commodity costs and levies off bills to cut the cost of electricity for businesses by 20%, without costing taxpayers a penny. But that’s just the beginning.
We have to rewire our market mechanisms, our regulators, and the machinery of Government to prioritise cheap electricity.
That is why I backed zonal pricing in Government and ordered a full system cost of our energy mix because we should cut the cost of our energy wherever we can.
But we must do more.
That’s why I can tell you today that the next Conservative government would go further…
Now, given what’s happened this morning, I confess this is probably the worst timed policy announcement ever, but some things are too important to put off for another day.
First. We will auction demand-side grid connections, so that a decade of delay is no longer treated as normal.
We have a choice here – we can either leave the connection queue in the hands of bureaucrats who are moving at glacial pace because they are by nature risk averse…
Or we can trust price signals to get us out of the quicksand and to get major projects off the ground.
Independent analysis suggests auctions could potentially raise billions of pounds in revenue which we could put back into the grid, saving consumers in the process.
We’re all waiting for transformers, we’ll here’s an idea – we could use that money to build our own.
We have to think radically.
Electricity demand is plummeting. That means we are building more and more equipment – more grid, more wind farms, more batteries, more storage – and there are fewer and fewer people to cover the costs.
That means the users who are left, which will be hard-pressed households in the end, face higher prices, which means they use less electricity too.
And on and on we’ll go in this doom loop. Higher prices and falling demand…
…which leads to higher prices, which leads to falling demand.
So, here’s the thing. AI could be our lifeline, not just out of declining growth, but also out of soaring electricity bills.
Falling demand is costing consumers billions, as ever-rising fixed costs are spread over a shrinking number of users.
If we want to make electricity cheap, then we need AI to succeed so energy-hungry data centres can cut bills for every household and every business in this country.
So auctioning connections is not a dry question of regulation. It can and will cut bills.
Second. We will inject competition into the transmission system and allow customers to build their own last-mile grid connections.
For too long, the transmission owners have had a monopoly on the system and businesses have been forced to work to the monopoly owner’s pace rather than their own.
That can mean sitting around and waiting for the better part of a decade before they can get up and running.
Well if you can move faster by building your own connection, we will let you.
Developing an independent transmission owner system will help break the monopoly and bring down delays and costs through competition.
And finally, we would strip out red tape that stops businesses from building gas generation behind the meter or small modular nuclear reactors where needed.
With the US Government ordering the withdrawal of Fable from foreign countries, people are worrying about whether Britain is surrendering sovereignty to foreign cloud providers. They are right to worry.
But here is the problem. The people who argue the loudest that we cannot have NHS data sitting on American servers…
…are the same people making it uneconomic to build the data centres in Britain that would solve that problem.
If you want data sovereignty – if you want British health data processed by British infrastructure – then you need to make it possible to build that infrastructure here.
Right now, our energy costs, our sclerotic grid, and our planning system are doing the opposite. We are actively kneecapping our own sovereign capability, and then lamenting our dependence on others.
The single best thing the Government could do for data sovereignty is to make it economically viable to build data centres in Britain.
We can follow these New Luddites – those who would rather obsess about Palantir than patient outcomes, who block our own AI capabilities and then lament our reliance on other countries' technology.
Or we can act now. By making electricity cheap.
By treating cheap, abundant energy as the national emergency it is.
Now people are worried about what AI means for their jobs and our creative industries – and they are right to be.
But those concerns are not answered by turning our backs on growth.
If we want to enjoy the benefits of AI… whether it’s developing drugs faster, helping doctors catch cancers earlier, or helping take violent criminals off our streets...
Then we need to be prepared to make the case for it and win the argument. Because the New Luddites are doing their best to make sure we don’t build the data centres and don’t reap the rewards.
The question is not whether AI happens. It will happen. The question is whether it happens here – with British innovation, British energy, British data, and the economic growth staying in Britain – or whether it happens elsewhere.
History is full of countries that missed their moment.
This moment will be the making or breaking of our country for the next century to come.
We can try to block progress – and become poorer in the process.
Or we can choose competitive abundance.
We can choose growth.
We can make electricity cheap.
