Levies, Damned Levies, and Statistics

Well that was about the most one sided PMQs you are ever likely to see.

Whoever was doing the prep work for David Cameron needs to be giving a good kick because that was comfortably the worst performance he has put in since becoming the Leader of the Conservative Party. You knew what was going to come up, energy and Sir John Major, yet he was so grossly underprepared it was pretty staggering. In saying that Ed Miliband gave arguably his best performance to date; he counter attacked, never let Cameron settle and his quip that ‘John Major was a Conservative Prime Minister who won a majority’ clearly rattled the PM who resorted to calling Miliband a ‘con man’ who was ‘living in a Marxist universe’ with neither remark landing any sort of blow. It was not quite a Tony Blair/John Major ‘weak, weak, weak’ moment, but ironically it was Major that helped tee Cameron up for the biggest trouncing he has had so far. The usually slippery DC has now been ruffled, is looking incredibly vulnerable and, worryingly for him, Miliband and Labour know it.

This has all stemmed from Ed Miliband’s speech at the Labour Party Conference 6 weeks ago. Like a hit number one, his proposal to freeze energy bills was both popular and has been played almost nonstop on the radio since. Some may call it a gimmick, others may call it unworkable but one thing is for sure it is a vote winner, a policy which addresses living standards and firmly draws attention to the criminal situation in this country where fuel poverty has meant that thousands of people will face the choice between heating and eating this winter. It will provide some respite to all, but especially those most desperate in our society who have seen their benefits capped or cut entirely, been taxed if they have been deemed to be living with the luxury of an additional room or simply been demonised and labelled as a scrounger if they are in the terrible situation of being unemployed.

Since Miliband’s game changing speech Cameron has been scratching around trying to find a riposte, searching for a policy idea that will match, never mind trump, Labour’s for effect and popularity. Labour has successfully shifted the debate to living standards and in particular fuel poverty, issues to the Tories are simply unequipped to deal with and it has shown. It really is quite something to see the Opposition, rather than the sitting Government, setting the agenda and indeed, future policy.

Cameron’s solution to cut green levies yesterday was as predictable as it was politically and practically clumsy to say the least. This is not so much as a U-turn as it is Cameron continually circling a roundabout, desperately looking for the right exit, before turning off in desperation and finding that he is heading off in a completely different direction to the one he intended. That’s if he really knew where he was heading at all.

If he thinks that this will be a more popular policy than Miliband’s price freeze then he is wrong; 75% of people don’t believe the energy companies when they say that ‘green taxes’ are the reason for steeper bills whilst less than 30% oppose the existence of ‘green taxes’ to help investment in renewable energy. Nearly half of the people questioned also thought that current balance of cost of energy and environment impact should stay the same with an additional 20% thought that energy bills could be increased further to implement more environmentally friendly technology; together this account for more than two-thirds of the population. Clearly then, popular opinion does not run parallel with David Cameron and his party so the cut in green levies is not designed to be a vote winner but a dramatic overhaul of energy strategy, surely?

Perhaps not; out of an average household energy bill of £1,267, green levies make up about £112 which works out around 9% of the overall bill. Of this, over 50% (£58) goes towards energy saving measures for low-income homes and a warm home discount for pensioners. These are the people most at risk from fuel poverty and it is not an exaggeration to suggest that thousands of peoples’ lives will be put at risk each and every winter if these support mechanisms are taken away.

Now underlying to all this is the presumption that many associate the green levies with renewable energy which is of course undeniably evil when compared to fracking and nuclear power stations (how dare us hippies promote an energy source that is stable, sustainable, clean, green and basically free once installed). The problem with this presumption is that 1). the vast majority of people support renewable energy and 2). the environmental and renewable energy factors to the average bill add up to £53 out of £1,255, just over 4%. Therefore, if these green levies were scrapped the saving would be a drop in the ocean when compared to the wholesale prices of energy and the margins and benefits the energy companies are enjoying from an oligopoly. Sure we may see a small drop in energy bills now but as long as we remain dependant on non-renewable resources, the majority of which are now sourced from abroad, then we will remain in a situation where an uncompetitive marketplace can dictate and enforce energy price rises of 10% or more. It is also thought that without these green measures, the average bill in 2020 would also stand £166 higher than it would have been otherwise. It is time to stop acting with such a narrow, short term view and look at the bigger, long term picture.

Green levies will help us build an industry in this country which will reduce a dependence on existing wholesale energy market by localising the supply of energy and providing a resource which is not so extremely susceptible to the effects of demand and supply. Increased competitiveness in the market will bring prices down and the interests of the consumer will come first with the introduction of more co-operative and community owned energy companies; it goes without saying that jobs and growth will follow. This is not a fanciful ideal but an ideas that are being put into practice despite this Government’s best efforts. Like any industry however, it needs room and support in order to blossom and not to be chocked off as a knee jerk reaction when the going gets tough.

I am not advocating higher energy bills, I am advocating people to look at the numbers. I am advocating people to look at our dependence on a finite resource, on the profits energy companies are making in an oligopolistic market place and the severity of the alternative options. I am advocating a stable, sustainable, clean, green future, a more competitive energy market with greater consumer input and ownership, with lower bills for all. I am advocating people look at who said to “vote blue, go green”, who promised the “greenest government ever” and who supported the introduction of green levies and increased them by 50% as Prime Minister. I am advocating that you also look at the person who oversaw the reduction of energy prices whilst Secretary of State for Energy and Climate Change, who has promised 1 million green jobs and has vowed to implement a price freeze.

I am advocating a better future.

Figures were sourced from the BBC and the Guardian which were in turn sourced from the Department of Energy and Climate Change (DECC).

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