Remember how the 'Big Six' energy companies were supposed to be ripping us off, condemning the elderly and poor to shiver while they feasted on stretched household budgets? The collapse of several energy companies over the weekend shows this as the fib it always was. Energy companies have certainly been guilty of exploiting their customers' inertia by offering loyal customers one price and frequent switchers a much better deal. But overall, the domestic energy market has long run on wafer-thin margins which frequently turn into losses. If you have had a great from one of the challenger firms in recent years it was most likely because it was cutting corners by failing to hedge wholesale prices – a folly which has now been exposed by the spike in gas prices.
Governments loved to blame energy companies for high bills because it deflected attention from one of the main causes of rising bills: environmental and social subsidies which according to Ofgem now account for a whopping 25.5 per cent of our electricity bills and 15.3 per cent of dual gas and electricity bills. While energy consumers were forced to pick up the tab for wind turbines and solar farms they were fooled into believing their high bills were a result of corporate greed.
It is pure Ed Milibandism , eagerly adopted by the Conservatives. Has there ever been a party leader who failed so miserably at the polls and yet who went on to become so influential on the government? The current energy crisis has been sparked by recovery in the global economy following Covid, but there is an indelible set of footprints which go back to the former Labour leader and current shadow business and energy secretary. It was he who in 2008 saw the Climate Change Act through its final stages, setting an 80 per cent cut in carbon emissions by 2050 without properly asking himself what that would mean for energy bills. It led, for example, to the hurried phase-out of coal without another reliable source of energy to replace it. As Labour's energy and climate change secretary, Miliband could at least have demanded that his green energy feed-in tariffs be paid for out of general taxation, but he chose instead to try to hide the burden by lumping the cost on our energy bills – effectively a highly regressive form of taxation. It was Miliband, too, who as Labour leader in 2013 came up with the energy price cap – formalising efforts to blame energy companies for profiteering while condemning them to collapse in the event of a spike in wholesale prices.
But it is no use just blaming Miliband, whom the British people were too sensible to elect as Prime Minister. We are only where we are because the Conservatives inexplicably fell for his policies at every turn. A mere handful of Conservative MPs opposed his Climate Change Act. Theresa May adopted his energy price cap and then upped Miliband's target of slashing carbon emissions by 80 percent target, upped to one of achieving net zero by 2050 – again without stopping to ask how this could be achieved without imposing serious costs on households and businesses.
Imagine if we had had a sensible policy for cutting carbon emissions that was not driven by the desperation of reaching this arbitrary target. We would have phased out coal, but only as fast as we replaced it with reliable forms of electricity generation – gas or nuclear -which are not dependent on the weather. It would not have run ahead with wind and solar before it had worked out a way of storing the massive quantities of energy generated on sunny and windy days so that it could be used on overcast and windless ones. Government would have encouraged the development of a UK shale gas industry, reducing our dependence on imports.
Instead, the Coalition followed by the Conservative government has tried to follow an impossible energy policy: promising low bills for consumers while simultaneously lumping them with the cost of a hurried conversion to renewables. If we are facing a crunch now, in early autumn, when demand for household heating is still low and solar energy relatively high, just wait until we get to November. It would be an apt conclusion were the government to gather the great and good of the environmental world at COP26 in Glasgow in order to boast of its achievements in climate policy – only for the conference hall to be plunged into darkness.
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From price caps to green targets, the chickens are coming home to roost on Milibandism have 917 words, post on www.telegraph.co.uk at September 20, 2021. This is cached page on Asean News. If you want remove this page, please contact us.