At the recent energy and climate change select committee se saw once more the typical self-serving performance from a range of chief executives from the ‘big six’ energy companies. It now transpires that one, the German-owned RWE Energy, has managed to arrange its financial affairs so that it has ‘avoided’ paying any corporation tax for the last five years despite earning over £700m. For all the big six energy companies over the next 12 months the profit earned from every household will double.
So far so typical for modern corporate Britain but this is slightly more important for most of us than Amazon and Starbucks. Energy bills are now a huge part of household expenditure and the poorer you are the bigger the burden. For an increasing number of those households their energy bills are the biggest bills they have to pay. The coalition government have created an energy policy which gives millions of pounds to rich landlords for use of their land for windmills and is just about to give billions of pounds to a French company to develop our nuclear power industry (of which we were world leaders in the 1970s).For domestic users as long as you have money and a big house you are literally quids in with solar panels and payments from the grid. For the rest of us who don’t have a suitable house or available resources we are at the mercy of the robber barons.
So we can’t carry on the way we are. What are the alternatives? Well, the good news is that a large number of councils are working together to encourage residents to switch to the best energy deal. First started by Labour Oldham these energy switching campaigns have produced impressive results for those who have participated with average savings of over £150 to the first set of switchers. However it is now evident that there are diminishing returns to energy switching with the latest auctions producing smaller sets of savings.
Whatever the merits of a renewable energy policy it is clearly evident that as a country we will be reliant on other forms of energy and specifically gas for the foreseeable future. If we are to have a rational debate on energy policy we need to decide whether this is gas produced in the UK or overseas. The real dilemma for Labour is whether a rational debate is going to be possible around the issue of shale gas. No one really knows the scale of shale gas reserves in the UK. The independent and respected British Geographical Society has undertaken an extensive survey, the results of which has been with the Department of Energy and Climate Change for several months now. If we wanted clarity on this issue we should be pressing for Ed Davey as secretary of state to release the findings of this survey as soon as possible
The issue of shale gas produces strong emotions and to a large extent the debate has been determined by environmental advocates. The Cooperative Bank has determined that those involved with shale gas are the equivalent of arms traders and excluded from funding. The rumour is that the Association of Greater Manchester Authorities has declared itself a ‘fracking-free zone’, regardless of the economic potential for its universities and manufacturing industries. The TUC at its last congress debated a multi paragraph motion on energy of which one sentence acknowledged the employment implications of shale gas exploration. Even respected journalists such as Andrew Rawnsley are reduced to calling advocates of shale gas ‘frack heads’.
The British economy is in a huge rut and a positive energy policy is part of the recovery. The tragedy is that we are allowing our response to be determined by a toxic combination of environmentalists and local nimbys. Of course the development of shale gas creates challenges. I was there for the development of the St Fergus pipeline in the 1970s. It involved a lot of lorries but it transformed the British economy (sadly to be completely wasted by Margaret Thatcher in the 1980s). Our future energy policy relies on gas. The only question is whether it is our gas or supplied from Qatar or Russia. Do we really want to be really reliant for our energy on Russian tryants and the complex politics of the Middle East (where the monies have supported a ridiculous World Cup bid for Qatar)
If we continue as we are we can expect energy shortfalls as early as 2015. The lights will be going out in a David Cameron version of the three-day week. This time they won’t have the miners to blame.
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Paul Wheeler is the founder of the Political Skills Forum
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