“Labour’s energy policy own goal will cost us all in the long-term”

Cross-post, in every sense, written by MCFly reader Jonathan Atkinson

Labour’s energy policy own goal will cost us all in the long term

By admin / December 23, 2013 / blog, lowwintersun / No Comments

In scaling back home energy efficiency subsidies, short term political expediency and corporate interests have trumped the lives and health of the most vulnerable and left us all more exposed to fuel price rises. Coinciding with the largest storm surge for a generation, the incomprehensible events of this Autumn have demonstrated the chronic lack of willingness on the part of politicians to take common sense, evidence-based actions necessary to limit the worst effects of climate change.

As is common, it started with political opportunism. The Labour party conference saw Ed Milliband make the surprise announcement that a future administration would play hard ball with the evil energy companies, freezing energy bills for 20 months. The ensuing debate initially wrong footed coalition and corporates, focussing on the practicalities, whether the Big Six energy companies were too powerful and the political advantage to be gained by Labour from such a bold move.

Few commentators questioned the underlying premise; of course we should be paying less for our energy! But the debate critically lacked the wider perspective of climate change, energy security and simple mathematics.

Our bills are made up of a basic calculation:
Total bill = the unit price of energy x the amount of energy we use
…we can reduce our total bill by reducing the unit price OR by reducing the amount of energy we use.

Sure, we could reduce the unit cost by using cheaper, dirtier fuels, but we know these sources of energy are depleting, we’re reliant on imports, prices are fluctuating and ultimately they are creating an unsafe climate.

A more sensible approach is to use less energy overall*, securing supplies (‘keeping the lights on’) and limiting emissions to relatively safe levels. Future price rise models show an increase in bills levelling off over time as energy efficiency and low carbon generation measures kick in. Unit costs may be higher but we’ll have stable bills steadily becoming cheaper in relation to other living costs and hey, as a by-product have warmer, healthier homes and self sufficient energy generation.

But following Milliband’s speech this context has been rarely presented. Instead we get ‘bold statements’ and ‘dog whistle’ sloganeering. By making it all about the bill, Labour’s tactics have ultimately backfired. It has allowed energy companies and the Treasury to make the argument that removing long term energy efficiency measures (aka ‘green crap’) will have the instant effect of reducing the average bill by £50 and fingers crossed, no bill increases for the next 18 months (taking us coincidently to the next election in May 2015). Bingo, Mr Milliband gets his wish and everyone wins.

So what have we lost? These green measures primarily mean Energy Company Obligation or ECO – an obligation levied on the Big Six to invest in home energy efficiency improvements. So whilst energy companies constitute a virtual cartel and make huge profits they have also had to put a little back, targeting the poorest, most vulnerable or hardest to treat homes by paying for or subsidising measures such as new boilers, loft insulation top ups, solid wall insulation or new windows.

Many social housing and low income households have benefitted from ECO but it has also been designed to compliment energy efficiency retrofit schemes such as Green Deal and Carbon Co-op’s Community Green Deal – ECO subsidy makes it financially viable to retrofit many privately owned homes.

The effects of reducing the scope and scale of ECO are wide ranging. Firstly it gets the coalition out of a hole, delivers an energy bill cut and undercuts Labour’s new policy. Secondly it benefits the energy companies, my information is that the ECO-roll back was essentially authored by British Gas’ lobbyists and that this single move is set to earn the company a one off windfall of £750m.

But there are losers. Fewer homes will be insulated meaning vulnerable and old people in cold, damp houses who would otherwise have benefitted from warmer homes will die sooner and suffer more chronic illness. The Green Deal, already mired in difficulty, will most likely fail and with it our only national mechanism for reducing domestic energy usage and carbon emissions. Around 10,000 jobs will go in the UK’s insulation sector. Ultimately, post May 2015, it leaves our energy system more dependent on foreign imports and more susceptible to prices rises.

So we have a policy that benefits large energy companies, disproportionately harms vulnerable people, makes the effects of climate change more likely and beyond the short term, doesn’t even achieve its stated aim.

What staggers me is the lack of opposition to this move, the shoulder shrug from politicians, the press and civil society in general. Perhaps it’s the fact that the poorest and most vulnerable are the least able to mobilise or that the promise of a one off price cut is enough to win over the undecided.

What it has confirmed for me is that politicians are unwilling to communicate the complexities of climate change politics, to challenge corporate interests or to contemplate decisions some would characterise as difficult but that I would simply term common sense.

If we’re to avoid ever worsening tidal surges, super storms, summer droughts and floods we are going to have to develop a new form of political governance and one that puts people and communities in charge rather than the corporate interests of a few.

Jonathan Atkinson is a founder member and project worker at Carbon Co-op as well as an environmental campaigner, activist and occasional blogger.

* For an excellent, evidence-based analysis of this situation read the Association for the Conservation of Energy Report, Energy efficiency: fighting to keep bills down permanently here: http://ukace.org/wp-content/uploads/2013/11/ACE-November-2013-Energy-efficiency-fighting-to-keep-bills-down-permanently.pdf

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About manchesterclimatemonthly

Was print format from 2012 to 13. Now web only. All things climate and resilience in (Greater) Manchester.
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3 Responses to “Labour’s energy policy own goal will cost us all in the long-term”

  1. gille liath says:

    Bizarre. How exactly is it Labour’s fault that the Tory / LIbDem coalition want to abolish the green levies?

    Obviously this discussion should take place in a climate change context, but you have to get real about peoples’ justifiable resentment at energy company profiteering. No energy policy which does not will ever get a look-in.

    And all this is from the guy who thinks it’s okay to kibosh insulation schemes to fund his home improvements! Some peoples’ priorities need sorting out.

    Merry bloody Christmas!

    • Hi Gille,
      I think Jonathan’s piece reads pretty clearly to me, and he can/will answer for himself if he wants.
      a) It’s not Labour’s “fault” that the Tory/LibDem coalition – and specifically I think just the Tories! – want to abolish the green levies, and Jonathan doesn’t try to make the case that it is. He merely seems to be saying that Labour is making it easier by proposing a certain policy.
      b) The real energy policy that doesn’t seem to be getting a look-in, despite being favoured by over 70% of the population, is re-nationalisation. Personally, I think we should put the whole re-nationalised energy system in the hands of the pointy-headed bureaucrats who have sorted out the East Coast Mainline.

      Merry bloody Christmas to you too! 🙂

      Marc

    • Jonathan Atkinson says:

      Yeah, maybe I should have made the point clearer.

      With his speech Miliband focussed the debate solely on energy bill unit price which opened the door for the coalition/energy companies to say, “Oh, if it’s all about price we can just cut these green levies and hey presto, cheaper bills.”

      By failing to set the wider context ie energy efficiency is the way to deliver long term price reductions and benefit the vulnerable, Milliband failed to ensure his audience would see through this move, he’s let down his political constituency and allowed his opponents to take political advantage.

      It was naive and stupid and now we’ll all pay.

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