Peter Hoskin

Cameron’s energy price headache

The list of things that will be Big Politics when Parliament returns from its summer break is growing all the time: growth, the post-riot clean-up, the undeserving rich, multiple squeezes, and so on. But few will have has much everyday resonance as another item on the list: rising energy prices. This has been a problem for some time, of course, thanks to a toxic combination of trickle-down green measures, oil price spikes, and financial effrontery from the energy companies. But it looks only to get worse. This morning’s Telegraph reports on an internal Downing Street document — entitled “Impact of our energy and climate policies on consumer energy bills” — which suggests that the coalition’s policies will add £300 a year to Joe Public’s bills by 2020.

David Cameron is said to be worried, and understandably so. With inflation expected to outpace wage growth over the next year, and beyond, the PM could do without tightening the vice clamped around folks’ pay-cheques. And he could probably also do without the Energy Department’s optimistic forecasts for the effect of “efficiency savings” on household bills. “We find the scale of household energy consumption savings calculated by DECC to be unconvincing,” reads the same internal note, “Their analysis may be based on the assumption that many energy efficiency measures will be taken up without subsidy, whereas we believe a large number of measures will need to be subsidised, given the hassle factor and other barriers to consumer uptake.”

So what’s to be done? The report itself hints that super-expensive technologies, such as off-shore wind turbines, might be reconsidered. And then there’ll be a lot of pressure on the government to start lowering, or jettisoning, various green taxes. But, as wise as either of these responses may be, the truth is that this is not a straightforward situation for Cameron and George Osborne.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in