The Government was quick to deny the suggestion that it is leaning on energy companies to hold their prices flat until the next election. The rebuttals were swift and, in one case at least, rather pungent. That the question arises at all speaks volumes, however. At next week’s Autumn Statement from the Chancellor, the pressure is on to ensure that the upturn in Britain’s GDP statistics is felt in the long-suffering voters’ pockets – and that means cutting bills.
Much is at stake. Ed Miliband’s commitment to freeze gas and electricity prices if Labour wins in 2015 may be shamelessly populist and economically unsound, but it has succeeded in laying down a challenge that the Coalition has so far failed either to meet or repudiate. Further details announced by the Opposition yesterday, and billed as the sector’s biggest shake-up since privatisation, only turned up the heat.
A deal with the Big Six is just the latest suggestion as to how David Cameron might spike Labour’s guns. His party’s favourite is still a crimp on the environmental levies added to customers’ costs. Faced with accusations of profiteering, energy companies point out that nearly 10 per cent of bills is extras such as the Renewables Obligation (for green infrastructure) and the Energy Company Obligation (to insulate the homes of the less well-off). For those who consider climate change at best a secondary concern, and who view ameliorative measures as subordinate to economic growth, pruning such tariffs looks like an easy solution.
There is no little evidence that the Prime Minister agrees. Downing Street officials may have denied that Mr Cameron wants to “get rid of all this green crap”, as is alleged. But there is no doubt that energy bills are at the top of the agenda and environmental levies are sliding rapidly down it. Talk of shifting one or more of them into general taxation has now calmed, only to be replaced by hints that the ECO scheme might be delayed to defray the cost.
The Prime Minister’s promise of “the greenest government ever” is, by now, nowhere to be seen. But the steady erosion of environmental priorities did not begin with the furore over energy bills. The Chancellor has long drawn the ire of climate campaigners, not least for his push to water down the commitment to renewable generation in the dog’s breakfast Energy Bill now on its way through Parliament. And then there was the decision to appoint Owen Paterson, a known climate-change sceptic, as Environment Secretary. As we report today, Mr Paterson’s views appear to be unchanged; in his 15 months in the role, he has had almost no contact with his department’s chief scientific adviser, and recent remarks to the effect that global warming might have advantages only add to the concern.
All of this is bad news for both the environment and for Britain’s energy sector. This week’s decision to shelve plans for a vast wind farm off the Devon coast may have been largely due to technical factors, but the mixed messages – from Government and Opposition alike – is no encouragement to investors. It is time for politicians to be honest. Energy prices are high because we need to control our carbon emissions, and there is no responsible alternative.