The Chancellor announced in his Budget that gas is cheap. Well, tell that to the 6.3 million households in fuel poverty. Despite the fact that 80% of the rise in energy bills in recent years has been due to rising gas prices, the Chancellor continues to pedal the myth that the rise in energy bills has been driven by renewables.
Pitching himself as the consumer champion, he promised to reign in renewables to ensure household energy bills did not rise too far. In the same breath he pressed the ‘go’ button on a dash for gas, claiming it was “cheap, has much less carbon than coal and will be the largest single source of our electricity in the coming years”. This is a bit like blaming fruit farmers for an obesity pandemic and calling for investment in donut factories as the cure.
The only explanation for the Chancellor’s comments is that he has been seduced by the fossil fuel lobby that the energy future of the UK should be based on gas, preferably UK shale gas. Although moving out of coal has clear carbon benefits, focusing on a gas based future will still lock the UK into a fossil fuel based energy system. That is not guaranteed to bring down energy prices and is simply not compatible with the legal obligation on the Government to cut our carbon emissions by 50% by 2025 and by at least 80% by 2050. It is also not compatible with the advice of the Committee on Climate Change to almost completely de-carbonise our electricity grid by 2030. But those targets mean little to the Chancellor. The Treasury fought hard to stop the Government signing up to the fourth carbon budget last year. After failing to regulate the banking industry, bringing the country to the verge of financial collapse, the Treasury is now failing to regulate the fossil fuel industry. The risk to the UK economy this time round is far worse.
If this Government was genuinely concerned with helping households to cut their energy bills, it would prioritise action to make homes as energy efficient as possible. The Energy Bill Revolution campaign offers a permanent solution to bring down energy bills. The Government will collect on average £4 billion in carbon tax from the European Emissions Trading Scheme and the Carbon Floor Price every year for at least the next 15 years. If this was recycled back to households, it could provide an average grant of £6,500 to 600,000 households every year to make their homes super-energy efficient. In time, every UK household could benefit. A big chunk of carbon tax ends up on household bills already, so this seems a just and fair solution. It could also create up to 200,000 jobs. The Prime Minister has already announced that the Government will look at recycling road tax to help fix Britain’s roads. So why not recycle carbon tax to bring down energy bills and end fuel poverty by making all homes super-energy efficient?
A gas-based future is not cheap. The economic cost to the UK of runaway climate change would be devastating. This Government has to make a choice. Is its primary responsibility serving the vested interests of the big fossil fuel companies? Or is it to serve the interests of ordinary households, millions of which are facing the decision this winter of whether to feed their children or heat their home? It’s decision time.
Ed Matthew
Director
Transform UK