Labour energy ‘policy’ is populist drivel

 

October 7, 2013

The leader of the opposition has very little power or influence, but he can do one thing – he can create damaging uncertainty. Ed Miliband did just that last week with his unexpected announcement that a future Labour government would cap energy prices.

As a former Energy Minister he must have known what effect this would have on energy markets; possible future investment in our power infrastructure; and long-term energy costs in the UK.
This is unforgiveable and puts the interests of his party ahead of those of the country.
The shadow energy secretary Caroline Flint has compounded this folly by saying a Labour government would also cancel the Green Deal and replace it with a new ‘energy save scheme’ – with no further explanation of what that might be. The Green Deal has had a terrible start with only 12 projects carried out at the last count – against the Government’s target for 10,000 by Christmas.
Ms Flint is right to pinpoint problems with the scheme including the ridiculously high interest rates (around 7%) attached to the loans and the reluctance of homeowners to take out another 25-year loan with early repayment penalties that will have to be sold on to any future buyer.
Populist
However, capping energy prices at some arbitrary point in the future and scrapping the one coherent initiative aimed at improving the energy efficiency of existing homes could hardly be construed as ‘policy’. This is just populist drivel. The Green Deal is the best we have and it needs fixing not axing.
Labour doesn’t have an energy policy and it didn’t have one when it was in government. To be fair, neither does the Coalition, who are thrashing around looking for a way out of the energy black hole we are falling into. They disastrously undermined the revised Part L and the Green Deal is foundering through lack of government support.
There was £135m of taxpayers’ money spent on promoting the switch to digital TV and radio, but just £3.5m on marketing the Green Deal. That just shows where the votes are and why just 12 Green Deal projects have been completed to date.
If you are going to ask people to put a value on something they don’t really understand; you have to push the message hard. Nobody wakes up in the morning and asks: ‘I wonder how much energy I can save today?’ They can see why a new kitchen or conservatory would add value to their property, but they are struggling to put a value on a possible energy saving sometime in the future. Why, then, would they pay for it over 25 years with 7% interest on top?
As I have said before, your future self does not exist. It does not come naturally to pay for something now that will only benefit someone who may or may not be in the same house sometime in the future.
Reduced council tax and a cut in stamp duty for energy efficient homes are incentives that might make a homeowner take the plunge now. You also need to make the scheme as easy and accessible as possible, which it isn’t.
There is clearly lots of work to do to save the Green Deal and it might not be salvageable. But it is irresponsible politics of the worst sort to say you will scrap it and think up something else in its place simply to score cheap political points.
The Armitt Review (ironically commissioned by Ed Balls) called for politicians to stop playing politics with our infrastructure and it is high time they stopped trying to score points over energy too. Labour’s latest populist outbursts are only undermining already fragile confidence in the value of energy efficiency – and our future selves will all be paying a heavy price if this politicking goes on for much longer.