Energy bills: Taxpayers' Alliance on Daily Politics Soapbox
- 14 September 2011
- From the section UK Politics
Each week, the Daily Politics offers a platform to a well-known face to make a film with their personal views on a subject, before debating them in the studio. Here, Matthew Sinclair from the Taxpayers' Alliance - a pressure group which lobbies for lower taxes - argues that energy bills are being inflated to pay for the fight against climate change.
When you open your gas or electricity bill, are you aware how much you are paying for failing attempts to cut greenhouse gas emissions?
The bad news is there is worse to come. In the coming decade, we can expect drastic hikes in prices to pay for draconian climate change regulations.
To meet our environmental targets, we will need to invest more in the energy sector this decade than Germany, France and Spain put together.
And paying for all that investment means higher profits for the energy companies. Paying for those profits means higher bills - £200 billion of investment doesn't come cheap.
Analysts at Citigroup have warned that the huge investment needed in the energy sector will require a real terms rise of more than 50% in our combined energy bills by 2020.
Using energy more efficiently might help a bit. But estimates suggest bills would still need to rise by a third and then we would have to pay for all the insulation and double glazing too.
They think that will mean an affordability crisis so it's no wonder a Populus poll in July found that more people were concerned about gas and electricity prices than any other economic issue - 63% said they were very concerned about energy bills, compared to 36% very concerned about public sector cuts.
Businesses will have to pay more too. Those that can't pass the cost on to us are in trouble. Tens of thousands of jobs are at risk, starting with the most energy intensive industries like aluminium smelting, producing industrial gases, steel making and the production of glass, paper and cement.
Energy is a substantial part of their total costs and if those costs rise here, they will come under huge pressure to invest elsewhere.
Despite hopeful promises from many politicians, green jobs won't make up for those lost opportunities.
Recently a firm called Solyndra in the United States, hyped up by President Obama and recipient of $535m (£340m) in government loan guarantees, filed for bankruptcy and was then raided by the FBI.
Even in Germany it seems, more jobs have been lost than gained thanks to these measures.
It is people in countries like China, who make equipment like solar panels at the lowest cost, who will get the green jobs, not mugs like us who buy them.
Despite the huge cost, this enormous rip-off makes little difference to potential global warming. Our paltry share of global greenhouse gas emissions - less than 2% - is almost meaningless.
Particularly if we just export the energy consuming processes. Emissions and jobs moving from Runcorn to Guangdong does nothing for the climate. Estimates in a 2008 study for Defra suggest that while greenhouse emissions produced in Britain have been falling, the amount produced supplying British consumers has been rising.
Politicians make all these measures less cost-effective by picking losers. The most expensive sources of power get by far the most subsidy.
Offshore wind gets nearly £100/MWh in subsidy. Electricity typically sells at wholesale prices significantly lower than that, so it's a massive subsidy on top of the return they can get selling the electricity they generate.
But when people put solar panels on their roof they can get an incredible guaranteed price of over £400/MWh.
It would be far more productive to focus on research for now, and deploy new sources of energy when they're affordable.
Big businesses enjoying windfall profits and governments levying hefty green taxes will make billions out of environmental policy.
Credit Suisse expect recent changes announced by the government to add £7bn to energy company profits between 2013 and 2020.
The Carbon Reduction Commitment will raise £1 billion a year for the Exchequer on top of the over £40bn a year raised by existing green taxes like Fuel Duty.
It's consumers that pay the price. The people who are hit the hardest are the poor and elderly, the most vulnerable families in Britain.
It is simply wrong for politicians to hand them the bill for this expensive, corrupted and failing agenda - particularly at a time when there are so many other pressures on their finances.
They can't afford it, Britain can't afford it.
Matthew Sinclair will be on Wednesday's Daily Politics where he will debate his ideas with Labour MP Tessa Jowell and Conservative MP Grant Shapps after his film is shown about 1240 BST. The programme runs on BBC Two from 1130 to 1300 BST, or later on iPlayer.