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Britain’s Energy Crisis Is Entirely Self-Inflicted

by Editorial
February 04, 2022, 12:30 PM
in News and Opinion
Reading Time: 4 mins read
A A
2

uk parliamentOn what has been dubbed Black Thursday, the consequences of incessant governmental interference in the energy market were mercilessly exposed when average household gas and electricity bills rose by more than 50 percent.

The price cap first proposed by Labour and introduced by Theresa May’s administration will be raised in April to take account of the rise in world gas prices.

Rishi Sunak, the Chancellor, announced a range of measures costing £9  billion to help cushion the financial blow which he blamed on forces beyond the control of the Government.

But while he is right to say wholesale gas prices are not set by ministers, domestic policy is – and what we are witnessing is the result of three decades of abysmal failure to develop a coherent energy strategy.

Nor is it good enough to blame Russia for “weaponizing” its gas supplies, even if that is true. Had this country invested over the years in new nuclear plants and shale it would be in a far better position to withstand such shocks.

All parties are to blame for this parlous state of affairs.

The Conservatives abandoned the nuclear program proposed by the Thatcher government in a “dash for gas”; Labour intervened in the market on environmental grounds, loading costs onto energy production that were carried forward by the Coalition government.

Legislation supporting this approach was backed by most Tory MPs 12 years ago and has been reinforced by the current Government’s carbon reduction targets. Around 20 percent of energy bills is now accounted for by social and green levies.

The big political question is whether the country is prepared to pay for net-zero now that people can see the implications of a policy that will do nothing to combat global climate change for as long as the world’s biggest CO2 producers refuse to change their own practices.

Moreover, the energy price rise is feeding inflation, which rose to 5.2 percent last month and is expected to peak at 7 percent in the spring, prompting the Bank of England to raise interest rates to 0.5 percent.

Yet Mr. Sunak’s package will go only some way to ameliorate the financial impact. For most households, it is worth £350, whereas average energy bills are going up by £700.

It will be paid by way of a discount on energy bills in October and a council tax rebate. At the same time, National Insurance Contributions are about to rise by 1.25 percent for employees and employers, while tax thresholds are being frozen.

As the Tory MP Peter Bone asked in the Commons yesterday, in what way is it a Conservative approach to raise taxes and then give the money back to selected groups through subsidies and handouts?

The Chancellor ruled out removing VAT on energy, which the UK is now in a position to do since leaving the EU. It would cut £250 from the average bill overnight but Mr. Sunak said it would disproportionately benefit the better-off.

Such dramatic interventionism would be unnecessary had successive governments not handled energy policy so badly. It has been a 30-year shambles, the ramifications of which will be felt for decades to come – and mistakes continue to be made.

Why, for instance, are we not following the EU in designating natural gas as a “sustainable” energy source to boost investment in its use as a transition to low carbon?

The craven failure to exploit vast quantities of shale; the neglect of the nuclear program; the deliberate refusal to give the go-ahead to continued oil and gas exploration in the North Sea while importing both from abroad; all have conspired to create the mess in which the Government now finds itself.

Loaning billions to energy companies so that they do not pass on the full costs to their customers but recoup them when wholesale prices fall assumes they will fall. If they don’t, the taxpayer is liable for the cost, so will pay in the end anyway.

Ministers invite us to believe that they are grappling with circumstances over which they have no control and yet Government policies are at the root of our problems, whether it be the stampede to net zero, the Climate Change Act, the energy price cap, the botched regulation of suppliers, or the failure to make critical decisions when they were needed.

This is not a crisis visited upon us by outside forces. It is homegrown. The fault and the solution lie with our own politicians.

Read rest at The Daily Telegraph

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Comments 2

  1. James says:
    4 years ago

    With energy prices increasing, wind turbines can pay their own way and for any gas or coal needed to back them up if the wind drops. Just don’t bother to call them green, if they need fuelled back-up, they are black. We watch the complete system, not just the piece we worship as a God or condemn as the Devil. We can all install a small generator if needed, and burn trees from the garden in winter. Just plant one every year and start chopping them when ready; indeed never buy a house, buy a hundred trees, it’ll be a better investment.

    Reply
  2. John Doran says:
    4 years ago

    An article trying to blame the poxy politicians, fine as far as it goes, but who is puppeting those poxy politicians?
    A: the banksters & billionaires.
    Climatologist Dr. Tim Ball’s great little booklet for the layman is a must read.
    only 121 well illustrated pages reveal all.
    the science, politics, money, people & their motives in pushing the climate fraud.
    Human Caused Global Warming The Biggest Deception In History.
    Dr. Tim’s & John O’Sullivan’s website: principia-scientific.com dedicated to truth in science.
    Put Ball defeats Mann in search box
    John Doran.

    Reply

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