X

Create an account to continue reading.

Registered readers have access to our blogs and a limited number of magazine articles
For unlimited access to The Spectator, subscribe below

Registered readers have access to our blogs and a limited number of magazine articles

Sign in to continue

Already have an account?

What's my subscriber number?

Subscribe now from £1 a week

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
 
View subscription offers

Already a subscriber?

or

Subscribe now for unlimited access

ALL FROM JUST £1 A WEEK

View subscription offers

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Login

Don't have an account? Sign up
X

Subscription expired

Your subscription has expired. Please go to My Account to renew it or view subscription offers.

X

Forgot Password

Please check your email

If the email address you entered is associated with a web account on our system, you will receive an email from us with instructions for resetting your password.

If you don't receive this email, please check your junk mail folder.

X

It's time to subscribe.

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access – from just £1 a week

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
X

Sign up

What's my subscriber number? Already have an account?

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Your subscriber number is the 8 digit number printed above your name on the address sheet sent with your magazine each week.

Entering your subscriber number will enable full access to all magazine articles on the site.

If you cannot find your subscriber number then please contact us on customerhelp@subscriptions.co.uk or call 0330 333 0050.

You can create an account in the meantime and link your subscription at a later time. Simply visit the My Account page, enter your subscriber number in the relevant field and click 'submit changes'.

Please note: Previously subscribers used a 'WebID' to log into the website. Your subscriber number is not the same as the WebID. Please ensure you use the subscriber number when you link your subscription.

Coffee House

Huhne, the Lib Dems’ black comedian

20 September 2011

2:22 PM

20 September 2011

2:22 PM

Today we got the black comedy follow up to Sarah Teather’s stand-up routine.
 Chris Huhne is going to drive down our energy bills! For those of us wondering how families and businesses can afford his
expensive climate policies, it is a bit of a joke.

The basic issue – as I set out in the new book Let them eat carbon – is that we need to
invest an absolute fortune to meet the range of environmental targets that the government has put in place. Citigroup estimated last September that we need to invest about €229 billion (about
£200 billion) in the energy sector this decade.  That is far more than any other major European economy.  We have a particularly ambitious renewable energy target and are relying on
a particularly expensive and unreliable source to meet it – offshore wind.

 

Paying for that investment will require energy companies to make more profit and push up electricity prices by 52 per cent – again these are Citigroup’s estimates.  And you
can’t offset all that with improved efficiency.  They think even with an impressive saving in gas demand there would still be a 35 per cent real terms rise in dual fuel bills, even
before we pay for all the insulation work that would require.

[Alt-Text]


By contrast, if politicians hadn’t decided that we needed to make a rapid transition to renewable energy then we would be in a pretty good position, with a fairly young generation fleet and
well-maintained networks meaning we don’t need to spend too much to keep the lights on.

Switching from one company to another might be a good idea for individual consumers right now.  But it won’t change the fundamentals.  Unless we start junking some of the current
targets, consumers will have to pay a lot more for their energy.

Politicians engage in these farcical attacks on energy companies – at the same time as they implement legislation that will boost those firms’ profits – as a way of ducking
responsibility for the consequences of their policies.  Ministers set themselves up as the consumers’ champion against the excesses of the “big six”.  They even set up
an entire quango – the useless Energywatch, now merged into Consumer Focus – to help spread that message.

The only reason those companies actually do deserve our ire is that they have been lobbying for many of these policies.  For example, EDF put a huge amount of work into securing the carbon
floor price which will hand them a hefty windfall profit while doing nothing for the climate as – in the IPPR’s words – “every ton of carbon that is priced out of the UK will be emitted elsewhere in
Europe”.

The industry has too often epitomised the crony capitalism that is destroying British confidence in free markets.  Their plan seems to be that if they deliver the investment needed they will
get political cover for rising profits, so long as they hug the politicians close.

That strategy is proving a dismal failure, and the performance of European utility shares has been torrid.  Faced with rising prices and rising profits, politicians will “get
tough” whether that means rhetoric and new powers for Ofgem – as Chris Huhne has proposed – or something stronger like a windfall tax.  Around Europe other governments are
cutting subsidies or imposing special taxes on the sector.

Draconian climate regulations are offering very poor value, as I set out for this site at the end of last week.
 British families and businesses are suffering to little end.  Insisting that we have to act to cut our less than two per cent of global emissions now and switch to much more expensive
sources of energy immediately is pure vanity when the major emitters aren’t going to do the same.  We could make a much more useful contribution by focusing on funding research and
development.

We need to heckle Chris Huhne with the facts until he puts down the microphone and let Sarah Teather or Lembit Opik retake the position of Liberal Democrat comedian-in-chief.  He is no
crusader against high energy bills, and we’ll all pay the price for years if we let him lock in high prices with expensive regulations.

Matthew Sinclair is Director of the Taxpayers’ Alliance.

Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.


Show comments
Close