Lots more weather and the problem of energy prices

 

           For the third winter in a row we have lots of weather, instead of the warmer climate forecast by many. Last week when I got up early to see how the roads were being treated, it was minus 8 degrees in what by now should be   mild Berkshire. Yesterday morning I woke to another covering of snow concealing the ice and compact snow  beneath.

          Given our vulnerability to weather even in an era of global warming, energy prices matter a lot to us as we have to turn up the heating and huddle indoors to keep warm. We also need to recognise just how big a cost energy is to anyone in manufacturing business. As the UK government wishes to have an industry led economic recovery, it needs to pay attention to this large bill.

           In order to write this piece I researched relative UK energy costs from the copious official figures put out by the UK government. Their Digest of UK Energy Statistics may not become a best seller, but it is a very professional compendium of price and volume information about our energy use, with international comparisons. 

          The comparisons are  also very revealing. They compare our energy prices with the USA and Canada, and with every European country in great detail, but fail to include our  big industrial competitors and suppliers  in China, India and Brazil. It just shows how Euro centric the establishment remains, and how inward looking Europe is, at a time when the exciting  industrial and economic action is happening a couple of continents away.

           The comparative picture is far from rosy. If we start with diesel, the lifeblood of transport, the UK diesel pump price after tax is the highest of EU 27, and far higher than the USA and Canada. Interestingly, the pretax price is the fifth cheapest in the EU, so the private sector is performing quite well, only to see very high taxes turn it negative. Unleaded petrol is the fourth cheapest in the EU pre tax, but is also the dearest  post tax.

           When it comes to electricity for industry, the UK at 8p per KW hour is in the pack of EU countries, but double the level paid by US businesses.  Gas is relatively cheap in the UK by EU standards, but the industrial charge of 1.7p per KW hour is  still 40% higher than the US charge of 1.2p. The Climate change levy imposes an extra 1-6% on gas bills, and an extra 2-5% on electricity bills here. If we were allowed to see the Chinese figures, they would also reveal how uncompetitive we are in this area.

            When the UK government was setting the carbon price for its policies I was consulted. My advice was to set a carbon price of zero until the rest of the world caught up with this way of doing business. High energy prices here do not stop the fuel being burned, they just divert the burning to cheaper countries who are not imposing these levies, taking industrial activity and jobs away from us. The Treasury, I read, did try to get the price down in its arguments with Mr Huhne. It is now working with the Business department on offsets or subsidies to the energy price for large process industry, understanding  that all we can really do here in the Uk with our energy prices is decide how much is burned here by industry, rather than helping control the world’s burn.

                The UK has a great advantage in the energy field. We have large new resources of shale gas available, some untapped conventional gas and oil resources, plenty of coal, and the possibility of more hydro and nuclear. I am all in favour of strict control over pollution, and encouragement of maximum energy efficiency. I am also very conscious that we are now paying a price for very dear energy. People on low incomes are suffering in their homes. More industry is going elsewhere to burn its fuel. The government needs to accelerate its programme for new energy sources, and to keep in mind the need to get prices back into a competitive range. While they are doing it, could they start looking at how far adrift we are from our true competitors in Asia and Latin America, as the EU slips beneath the gathering storm waves of the Euro.

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119 Comments

  1. me
    Posted February 11, 2012 at 6:39 am | Permalink

    Don’t know if my area is typical but there is a real groundswell of absolute fury and the wind turbine madness the tories are signed up to.

    • Do we need the BBC?
      Posted February 11, 2012 at 8:59 am | Permalink

      What is your plan regarding shale gas, John? Clearly both Cameron and Clegg have a personal conflict of interest when it comes to energy, which may explain why they let Huhne make an absolute mess of it. Still, as long as the windmills keep turning eh (occasionally, not when it is cold and as long as its on my land please).

      Seriously, does the (real) conservative party have policy on Shale gas, or will the agenda be set by a few beardies and a discredited Gaslight?

      Even if we believe that drilling in Blackpool caused a slight earth tremor, HS2 has demonstrated that some must suffer for the greater good and I can’t see the good people of Lancashire worrying too much at the thought of a massive new industry appearing in the midst of their economically depressed area at the cost of a couple of china tea cups.

      Has anyone thought to ask them? Seriously, an opinion poll across Lancashire – a billion pound industry for the risk of a few minor earthquakes. Do you want it? The people of Aberdeen have not exactly enhanced the beauty of north east Scotland whilst drilling for oil, but somehow they coped..

      Reply: Some of us wish the government to assist the industry – through offering the relevant permits – to get on with finding out how much shale gas we have, and extracting it preferably from areas well away from people’s homes. The indicatiosn are that it stretches well beyond Blackpool houses. Of course more work needs to b e done on the best methods of extraction, to avoid damage to property and water courses. The US is pressing on with resolving these issues.

    • A different Simon
      Posted February 11, 2012 at 2:03 pm | Permalink

      me ,

      Is it just wind mills or would they object on principle to any sort of development ?

      For instance , would they object to shale development and hydraulic fracture stimulation like the people in Balcombe ?

      • lifelogic
        Posted February 11, 2012 at 9:00 pm | Permalink

        They would probably, as you say, object to any development, but wind does not even work. So their objections should be respected – in the case of shale or nuclear it does work so it makes sense often to override local issues.

    • Dr Bernard JUBY
      Posted February 11, 2012 at 2:06 pm | Permalink

      The same ground swell is hitting France where we have many nuclear-based electricity programmes and even more useless wind turbines. I hope that you are signed up to Chris Heaton-Harris’ All-Party Group?

    • Dave B
      Posted February 12, 2012 at 11:50 am | Permalink

      I think the big worry on that is HMG signing long term contracts with rent-seeking “renewable” power generation firms that a later gov’t will have to pay thru the nose to escape. An attempt to outdo Labour’s PFI debacle.

      (I seem to remember Mr Huhne was poised to sign 30 year contracts guaranteeing prices.)

  2. Antisthenes
    Posted February 11, 2012 at 7:18 am | Permalink

    The Green movement and environmentalists are genuinely concerned people but are at the same time very misguided. It is appropriate that the word environmentalist includes the word mentalist because to a large part that is the type of person attracted to that movement. The likes of Caroline Lucas and Huhne who have the weirdest ideas about what political policies and practices government should follow are greatly contributing to our economic woes. If these people have their way the best that can be expected is that we will all be living at subsistence level. Climate change is far from a settled scientific fact on causes and effect. So it is madness (mentalist) at this time to be putting so many resources into tackling a problem that has not been properly identified with solutions the consequences of which are not fully understood at a time when immediate far more pressing problems assail us. A far more sane approach would be to firstly encourage more balanced scientific studies of the climate and not leave it all to the mentalists. To tackle specific problems that are patently true and obvious as they arise. Also to accept that climate change if it is happening on the scale and in the manner that mentalists would have us believe is doing so over a long time scale. During that period technology will advance that can be more cost effectively employed in tackling any adverse consequences and no doubt show that solutions put in place today have been very misplaced that encouraged wasteful investment.

    • Nick
      Posted February 11, 2012 at 8:33 am | Permalink

      Yes, spot on. You wouldn’t mind if instead of using ‘green’ as a way of taking money it was given back, say making insulation free for everyone or at least a tax write off, or met half way somehow.

      I think everyone is fully aware that the energy taxes are nothing more than that. There is no environmental interest whatsoever. How can there be when China builds a powerstation in the time it takes the dept of energy and idiocy to ‘table a motion’?

      Comically, when the Greeks did this the Greek engineers nobbled the system to prevent this tax being levied. I think us Brits are just too accepting, too willing to carry on.

      What I truly don’t understand is that despite a ruined economy, despite huge unemployment, despite the obvious advantages of a low tax economy cheap energy and fuel this damned government continues the deranged policies of tax and waste undertaken by the malevolent socialists.

      Government is not the answer, it is the problem. We need low taxes (especially abolishing employers NI), cheap energy, cheap fuel, low regulation. While Cameron is desperate for his Eurojob we won’t get low regulation but we should be getting low taxes – or is that something The Boy has parcelled off as well?

      If so, what’s the point of our government?

      • lifelogic
        Posted February 11, 2012 at 9:03 pm | Permalink

        Insulation sometimes makes sense sometimes not. The best solution is the market without government distortion and interference. Let people decide based on real market costs.

      • Glyn H
        Posted February 12, 2012 at 8:16 am | Permalink

        “What I truly don’t understand is that despite a ruined economy, despite huge unemployment, despite the obvious advantages of a low tax economy cheap energy and fuel this damned government continues the deranged policies of tax and waste undertaken by the malevolent socialists.”

        What an excellent summing up of the wide disappointment I sense concerning the Cameron Government.

    • A different Simon
      Posted February 11, 2012 at 12:37 pm | Permalink

      Completely agree .

      I was watching a video of a H.O.C. Committee investigating shale development .

      They were under the preconception that a well would take a huge amount of water with figures like 50 million gallons or more being talked about .

      The manager of the shale company put it in terms of olympic size swimming pools .

      What was evident to me was that the MP’s had absolutely no conception of numbers bigger than thousands and got quite scared about it . I believe this reaction is representative of the population as a whole when confronted with large numbers ; stick their heads in the sand or abject terror .

      The shale company pointed out that much more than this leaked from mains pipes every day and that shale gas companies were not the only industrial user of water .

      One can only imagine that if these M.P.’s had of been taken round a steel-works they would have been reduced to frightened souls , huddling in a corner needing medical treatment for shock .

      • Dr Bernard JUBY
        Posted February 11, 2012 at 2:11 pm | Permalink

        Did they understand the problems with fracking – where huge amounts of water and toxic chemicals are pumped at very high pressure to split the shale? Did they explain what happened to the waste water or how they stopped gas from filtering up into water tables, rivers, lakes and streams, killing fish or, even, poisoning the atmosphere with fumes and enabling water taps to be ignited?

        • libertarian
          Posted February 11, 2012 at 8:58 pm | Permalink

          And you have real scientific evidence for any of that abject nonsense have you Dr JUBY?

        • Robert Christopher
          Posted February 11, 2012 at 11:51 pm | Permalink

          And how safe it is and also how easy it is to stop these problems?

          • A different Simon
            Posted February 13, 2012 at 7:56 pm | Permalink

            Problems of tap water being ignited have been recorded from natural releases of coal bed methane and biogenic methane .

            There may have been isolated cases where a cementing job on a well , be it shale or conventional well , leaking and methane being absorbed by an aquifa .
            Small communities in rurual America may obtain their water directly from an aquifa . In the UK we generally obtain our water from the mains from reservoirs .

            There is worse stuff down there which could also make it’s way to the water table due to a bad cementing job ; traces of heavy metals and radioactivity .

            Instances of a bad cementing job would be so uncommon onshore in Europe and the oil services companies advertise remedial services .

            I would be more concerned with the natural seal above the shale . So long as the geology is understood and the seal rock is not extensively fractured or permeable I wouldn’t worry about shale exploration under my house .

            Unfortunately we live in a society where risk is considered bad and any risk is seen as a reason not to do something – a large part of the reason our country is going down the toilet .

        • APL
          Posted February 12, 2012 at 10:13 am | Permalink

          Dr Bernard Juby: ” and enabling water taps to be ignited?”

          Question asked for ‘scare’ television program vilifying ‘phracking’.

          Q. Are you able to light the water that flows out of your tap because of the flamable gas content?

          A. Yes

          Questions not asked:

          Q. Before phracking. Were you able to light the water that flows out of your tap?

          A. Yes.

          Conclusion that doesn’t fit with the thrill and scare of the docudrama, there was flamable gasses in the water before phracking was taking place in that particular geographical region.

        • DaveK
          Posted February 12, 2012 at 8:57 pm | Permalink

          Doctor Juby please return the DVD copy of Gasland you rented and don’t forget it’s from the fiction section.

    • oldtimer
      Posted February 11, 2012 at 2:50 pm | Permalink

      I agree. The science is not settled even though the advocates of decarbonising the UK economy like to give you the impression that it is. The day will come when the advocates and supporters of the Climate Change Act will be as vilified much as city bankers are today and with greater reason. The cost is and will remain much greater than the banking crisis, and its effects will last longer.

  3. lifelogic
    Posted February 11, 2012 at 7:22 am | Permalink

    Spot on as usual. All the energy intensive industry and jobs go off to cheap energy countries, where they will also have less tax and less government interference too. No carbon savings anyway, probably the reverse in fact. Not that I take the carbon, over exaggerations, very seriously anyway.

    The solutions anyway are very clear nuclear fission and later fusion, genetic, insulation, heat pumps, combined heat and power, fuel cells and other engineering. All needless to say nearly all are resisted by the quack priests of the green religion.

    The greens in general are dangerous, unscientific and mad. They are, like TV evangelists or religious figures in general, riding on peoples ignorance and fears. Many end up in the Lord like other Bishops and worse still they are wasting tax payer money and ramming it down our throats through the BBC and schools.

    • lifelogic
      Posted February 11, 2012 at 7:36 am | Permalink

      I see in the telegraph that:

      Danny Alexander, a Liberal Democrat Cabinet minister, says the better-off are receiving overly-generous tax relief when they invest money for their retirement.
      Mr Alexander’s proposals would see tax relief halve from 40 per cent to 20 per cent. He also wants workers on the minimum wage, who earn up to £12,500 a year, to pay no income tax at all.

      Tax relief on pensions is really a tax deferral. You pay the tax when you draw the pension later. In effect the proposal would make saving more than about £600,000 would usually be pointless as it would push you into higher rates in retirement with the state pension too. Will they be limiting the over pensioned state sector and MP’s in this way too? Or will they still get nearly 2M as a cap? I suspect the latter.

      It is another Gordon Brown mugging tax but even worse.

      • Electro-Kevin
        Posted February 11, 2012 at 9:57 am | Permalink

        Bearing in mind that it’s pensions and savings that are being hit to pay for the banking crisis.

        Our politicians seem to despise prudence.

        • Mark
          Posted February 11, 2012 at 5:10 pm | Permalink

          They are simply attacking any accumulations of wealth – while people like Willetts tell us pensioners have never had it so good. Macmillan was at least correct when he made that claim.

      • A different Simon
        Posted February 11, 2012 at 11:11 am | Permalink

        Exactly ,

        Perhaps Mr Alexander would like to work in the real world where there are no employer contributions to pensions for either the employed or of course self employed .

        What about people who are in the 40% tax band one year and earn next to nothing the next rather than in continuous employment ?
        Assessing tax on a yearly basis penalises them .

        Does Mr Alexander realise that people with defined benefits pension
        are getting tax relief at 40% too ?

        Has he thought that the simplicity of the current pensions arrangement would be completely destroyed ?

        I’ve had a bellyful of discrimination against those of us plebs who have to look after ourselves .

        Danny Alexander and his ilk can **ck off .

        • Robert Christopher
          Posted February 11, 2012 at 11:56 pm | Permalink

          I believe that people in some jobs, like acting, are allowed to spread their high earning, that might be made over a few months, over several years to reduce their their tax bill.

          I would expect this sort of ‘tax avoidance’ will be ‘stamped on’ if the higher tax relief on pensions is removed.

      • sm
        Posted February 11, 2012 at 2:14 pm | Permalink

        The higher rate taxpayer would also hope the pension benefits on exit would attract a lower rate of tax by virtue of being below the income thresholds and allowances which are also proposed to increase ( at least at the moment).

        Or is it just chance the top 1% win in the public or private pension arena.

        Perhaps a tax should be imputed on the equivalent state subsidy on state pensions and taxed via paye?

    • lifelogic
      Posted February 11, 2012 at 9:39 am | Permalink

      Sorry I meant “genetic engineering”.

      May I also recommend “Green Philosophy” by Roger Scruton and Watermellons by James Delingpole both are excellent?

    • Disaffected
      Posted February 11, 2012 at 10:43 am | Permalink

      Lifelogic, I hope you now understand that the ploy to whip up hysteria over public sector pensions was pure deceit and to reduce support for public sector pensions. The real reason is that the socialist Coalition are reducing private pensions by about 25% by QE.

      The socialist Coalition also reduced public sector pensions by about 20% by changing the inflation rate. Sophistry and deceit were used to help them achieve their aim of robbing both public and private pension schemes and minimise public outrage from both sectors of society by embattling both against each other.

      As Fraser Nelson highlighted yesterday, the Coalition could hardly have gone to parliament and said we want to take £74 billion from private pension funds to shore up the economy. Cameron is now using sophistry to say he is attracted to increasing the pension age as we live longer and that pensioners should down size their home and work longer. What he should be honestly saying is, I have messed up the economy and am taking money from pensions to pay for it. He is doing more damage to pensions than Gordon Brown ever did.

      Look at the pensions for the BoE staff. Index linked gilts. It is mooted this change came at a time when it was tantamount to insider dealing.

      Pensioners wake up: the socialist Coalition are robbing your pensions far worse than Gordon Brown ever did. He wants to also rob you of your savings and make you pay very high prices for food, energy, community charge etc. All the plans you made throughout your working life will be lost by economic stupidity of adolescents who studied PPE at Oxbridge.

      High energy costs will increase the price of everything. Remember this when the chance to vote comes around.

      • A different Simon
        Posted February 12, 2012 at 12:38 am | Permalink

        Disaffected ,

        Quote “The socialist Coalition also reduced public sector pensions by about 20% by changing the inflation rate. ”

        Disagree , that was only for the millionaires in the Police force and Fire Service .
        Yes they retire early and risk their life but nothing like a deep sea fisherman who get’s nothing but disdain from a Govt which shares their hunting ground with foreign mongers .

        Let’s consider teachers , one (of the only?) parts of the public sector which is underpaid and which we would benefit by raising the remuneration of .

        Reducing the pensions changes to a common denominator of 1/480 ths

        Teachers
        – Before :- 80ths ie 6/480th’s
        – After:- 60ths ie 8/480’th’s

        Ie the INITIAL benefit is 33.3% better and you would have to live a very long time for the difference between RPI and CPI to erode that .

        If I’m wrong about public sector pensions being robbed please tell me .

        Do you think there is any justification for preserving defined benefits pensions in the private sector and making those who will consistently be worse off (private sector plebs like me) guarantee those levels of benefits ?

        • A different Simon
          Posted February 12, 2012 at 12:40 am | Permalink

          Correction :-

          Do you think there is any justification for preserving defined benefits pensions in the PUBLIC sector and making those who will consistently be worse off (private sector plebs like me) guarantee those levels of benefits ?

          • lifelogic
            Posted February 13, 2012 at 4:03 pm | Permalink

            It clearly cannot be justified but it will continue under Cameron I am sure.

    • Disaffected
      Posted February 11, 2012 at 10:48 am | Permalink

      It is an EU target and must be obeyed. As we recently seen, Cameron does not have the courage to stand up to the EU or Lib Dems. I loathed Labour, but this lot are making Gordon Brown look good.

      Labour will keep their core vote and Tories will be in opposition for a very long time. it will not matter to the current regime as they do not need to work or save for elderly life- they were given wealth on a plate.

    • Bazman
      Posted February 11, 2012 at 2:21 pm | Permalink

      As well as less tax and less government interference they also have scandalous safety records with terrible working conditions and low wages. Would you be concerned with this or would you say it is just exaggeration? China also has quite high tax rates and a lot of government interference allowing big corporations to roll over everything.

  4. barnacle bill
    Posted February 11, 2012 at 8:04 am | Permalink

    A worthy and informative post Mr. Redwood, if only the leadership of this coalition government was listening to your good self and us shivering proles.

  5. Nick
    Posted February 11, 2012 at 8:20 am | Permalink

    Currenty it’s about -2 outside and my boiler, a daemonic 38kw monstrosity is struggling to pull enough gas in to ignite. The hter half is cold, wearing a jumper to bed. The children have the dog in with them. Our gas bill has soared 20% due to the idiot Huhne’s tax hike. I’m likely to need to put a wider pipe in form the meter which is yet another cost – oh, and the idiot Boy wants me to pay another 20% tax in VAT to the plumber to do that costing me £600 instead of £500. Is he insane?

    When you’ve a set income and are not super rich these costs are significant. When I fill the car up it’s £70 every two weeks just to get to work – almost as much as my council tax for the same time period in tax. Mr Redwood, these punitive taxes are destroying Britain. We cannot continue like this. Taxes are too high.

    I know The Boy won’t listen to you, obsessed as he is with filling in his expenses form to make us pay for his petrol but if this carries on my company will have to close and all the tax – 75% of our earnings – will disappear. Please, please, get taxes cut across the board. Make the state live within our means.

  6. Bernard
    Posted February 11, 2012 at 8:21 am | Permalink

    I think Energy Suppliers should give customers a complete breakdown of all the taxes that are added to our bills. At the moment I cannot see from where the huge increases are coming.
    I can guess mind you!
    “Nothing to hide, nothing to fear”.

    • Bazman
      Posted February 11, 2012 at 2:24 pm | Permalink

      There profits, and costs would be an interesting read too. Which explains why so many go to great lengths to avoid it being transparent.
      “Nothing to hide, nothing to fear”.

  7. Kevin Ronald Lohse
    Posted February 11, 2012 at 8:26 am | Permalink

    An interesting take from a normally a-political source

    http://www.straightstatistics.org/article/spinning-wind-powered-future

  8. Edward.
    Posted February 11, 2012 at 8:39 am | Permalink

    Government fuel duties are killing the country, some Conservatives can perceive what an awful own goal that this is, Lib dhimms will shut their eyes and shout and quote EU green energy AGW mantras, mouthing; “we’re all doomed!”

    Well I’ve had enough of the ‘Chicken little’ approach but it seems the Red Tories can’t get enough though and therein lies the problem.

    Simple answer, stop voting; Tory, Lib dhimm or Labour for that matter.

    If we do not return to our senses, drop the ideological green lunacy, then there will be a mass exodus of what remaining industry we still have left.
    Cameron keeps banging on about ‘British competitiveness’, to do so whilst still clinging to a green agenda is; a cognitive dissonance only a politician can be comfortable spouting.
    We do not have an energy policy in this country, Germany is closing it’s nuclear capacity because of unfounded fears of a catastrophe but is switching to coal fired plant, typical Teutonic pragmatism and stuff to the green agenda.
    As you rightly say John, we are blessed with an abundance of coal, gas and oil, billions of cubic metres of shale gas and gas can be converted into other petroleum products.

    We have a competitive edge, we are numb not to take advantage of it.

    But then, anyone who is numb enough to vote for or represent the ‘big three’ is braindead anyway.

    All power to the EU – btw – and close the door when you leave.

  9. A.Sedgwick
    Posted February 11, 2012 at 8:42 am | Permalink

    In 2011 my unit gas cost went up 19%, electricity 8% and water 6%. Adding the similar rising cost of food, transport, house maintenance, insurances and dental charges these are my real inflation rates. As I have written through the years of Cameron I have felt he was increasingly a disaster waiting to happen. The energy situation along with AGW is farcical, a very recent report by some eminent scientific body basically said it is the sun stupid, which most of us old unscientific Tories(once) have been saying for years.
    It is laughable that the EU, behaving and looking increasingly like the USSR, is ignoring hard realities e.g. China adding one dirty coal power station per week and covering all conurbations in smog like 1950s London. They will wake up to clean air eventually but it will be nothing to do with AGW.

    • uanime5
      Posted February 11, 2012 at 3:54 pm | Permalink

      Perhaps you should send the ‘report by some eminent scientific body’ to NASA as according to them the sun should have started cooling the planet, yet the average global temperature keeps rising.

      • libertarian
        Posted February 11, 2012 at 9:02 pm | Permalink

        Perhaps you should read the latest reports on climate which show the average temp ISN’T rising. But hey why let facts and real science stand in the way of a political philosophy

  10. Leslie Singleton
    Posted February 11, 2012 at 9:09 am | Permalink

    Any idea why we use tidal power so little? The tides are 100% reliable with the UK ranges very high, so very useful, whereas the wind is not, with its unpredictable periods of too little or too much and ruination of large tracts of the countryside. The arguments against often seem to be either that the estuary in question is too large and so any tidal scheme too expensive (especially if a two lagoon system to enable continuity all day long is not available naturally) or so small as not to be worthwhile. And it’s by no means just barrages: what about underwater turbines which have the obvious advantage that ships don’t crash in to them? Also there is wave power, a different subject, both up and down and the end effects I remember being taught at school. OK, these schemes are initially expensive but they sound like a good investment to me with the prize a century of free energy. Rather than blowing all those tens of billions on getting to Birmingham a few minutes more quickly, the tides and waves is what we should be investing in.

    • uanime5
      Posted February 11, 2012 at 3:56 pm | Permalink

      The previous Government did consider harnessing the tidal power of the Severn estuary.

      http://www.decc.gov.uk/en/content/cms/meeting_energy/wave_tidal/severn_tidal_power/severn_tidal_power.aspx

      • A different Simon
        Posted February 12, 2012 at 12:43 am | Permalink

        They weren’t the first .

        That’s been on the cards for something like 100 years .

    • Mark
      Posted February 11, 2012 at 5:27 pm | Permalink

      The answer is it isn’t economic. There are some quite lavish subsidies available – anything from 200% bonus up to 500% in Scotland (why they get so much I don’t know – do we ask Gordon Brown and Ed Miliband?).

    • stred
      Posted February 12, 2012 at 7:58 am | Permalink

      Suggest you read the ‘Without the Hot Air’ book by Prof McKay- free on the net. In this he analyses wave energy and proves that is can only work on a small scale, as there is less energy coming in than we thought. It is even more useless than wind power. The best tidal source would be the Severn estuary, and this could power a significant portion, but this will be scuppered by bird nimbies and the cost would be high. Tidal turbines would only provide a small contribution, but would be more reliable than wind, as tides are regular.

    • lifelogic
      Posted February 12, 2012 at 5:16 pm | Permalink

      Tidal energy need a large area of “reservoir” to be barraged off hence the Severn. The useful energy is in proportion to this area. Expensive and not very “environmental” not many suitable bays.

      Oh and it is not “renewable” it takes the energy from the earth’s rotations.

  11. Tedgo
    Posted February 11, 2012 at 9:21 am | Permalink

    I had my ‘all good things come to an end’ letter from Npower yesterday. My Online 21 tariff comes to an end on 31st March. The unit rate will go from 9.46p/kWh to 14.43p, an increase of 52.5%. Yes 52.5% increase. We are all electric, using about 16000 kWh a year. The letter has the usual line about being a valued customer.

    If they can supply electricity at 9.46p now they can do so in the future, what has changed, electricity prices are in fact dropping.

    Within 20 minutes I signed up to Ovo, who can supply me at 9.692p/kWh, for 12 months with 3% interest on any credit balances on my account.

    Ovo have only 2 tariffs whereas Npower list 52, though some are not now available.

    • stred
      Posted February 12, 2012 at 8:06 am | Permalink

      I have signed 4 properties with Ovo and service is better. Customers are encouraged to be economical as the rate does not decrease with higher usage.

      Stand by for a predatory take over and wipe out when they become a bit too successful.

  12. John B
    Posted February 11, 2012 at 9:40 am | Permalink

    Carbon taxation: despite all the regulation, taxation and climate blather, CO2 emissions continue to rise everywhere: no Country anywhere is reducing them.

    If taxation to change behaviour is not working, then either it is set too low or other factors prevent it from having any effect.

    If the UK Government is serious about “Climate Change” it should set carbon taxes high enough so that industry and private citizens will reduce their energy use by at least 50%.

    Remember: we have no time to lose on the global warming doom – the tipping point is ever getting closer.

    Alternatively it should put the UK on rationing like that during the 3 day week of the 70s, when electricity was supplied on rota, four hours on, four hours off and businesses operated only for 3 days each week.

    Petrol/Diesel rationing would also be necessary as with home heating oil/gas.

    This would have the additional benefit of depriving workers of income to buy energy and consumables, would drive up the cost of goods and services and further reduce demand, drive businesses bankrupt and thus reduce carbon emissions.

    Ultimately everyone could live on capped welfare of £26 000 per week.

    Of course this is absurd, but is the Government’s so-called policy any less so: an expensive, destructive policy which cannot meet its intended aims?

    Are bankers’ bonuses/Knighthoods really a more important issue than this?

    Why no clamour in Parliament? Exactly what are MPs doing?

  13. Martin
    Posted February 11, 2012 at 9:40 am | Permalink

    Re your remarks about the Euro and by implication Greece – always ask which large country might consider Greece to be part of its’ sphere of influence and might be stirring things with Communist Unions in Athens?

  14. Pete
    Posted February 11, 2012 at 9:40 am | Permalink

    It’s amazing that more people don’t realise that the government makes us grossly uncompetitive not just on fuel but on everything. It regulates and taxes almost to the point of strangulation yet we still get the same old voices calling for more controls, more regulating quangos, more interference.
    What we really need is a massive reduction in taxation and regulation and a whole lot of jobs in the public sector ended (especially those in the EU). Probably two thirds could go and we’d be better for it. It would be like a good strong dose of laxative and might even get the sick economy off it’s death bed and back to work.

  15. Brian Tomkinson
    Posted February 11, 2012 at 9:41 am | Permalink

    This government prefers to collect more tax than to reduce spending and so we can expect little help from them. Unless Huhne was as powerful in the cabinet room as some LibDems would have us believe, the government seems determined to plough ahead with its crazy ambition of being the world leaders in reducing carbon emissions regardless of what it means to our own people and businesses. As far as domestic enegy users are concerned the green light was given to energy providers to charge what they like. I recently heard that my provider EDF was the first to announce a 5% reduction in gas prices from 1 February, subsequently to find that this applied only to the standard tariff and that my gas price would remain unchanged having had a double digit % increase in the second half of last year. Is it surprising that this country’s growth is stalling when more consumers’ money is having to be spent on energy and inflation and businesses are being made uncompetitive by the actions of its own government?

  16. alan jutson
    Posted February 11, 2012 at 9:42 am | Permalink

    Your post today John outlines the simple basic problems we have as a Country.

    Because we are spending too much, we have to tax too much on a whole range of things, as well as income.

    The simple solution is for the State to spend less, and lower all taxes accordingly.

    Why those in charge cannot see the wood for the trees, I do not know !

    Time to stop the something for nothing mantra, pure and simple.

    The £35,000 gross benefits limit is far too generous.
    Limit child benefit to 2 per couple, or one for each person.
    Transfer a non working partners tax allowance to the working partner.
    No tax take from the minimum wage.
    No benefits for no record of contributions.
    No benefits until the age of 21.
    Stop all immigration until we can implement a sensible policy.
    Get out of the EU.

    • Bazman
      Posted February 11, 2012 at 2:27 pm | Permalink

      The basic question is should this be implemented is how the persons effected should live without money?
      If anyone cannot answer this they cannot see the wood for the trees as you say.

      • A different Simon
        Posted February 12, 2012 at 12:55 am | Permalink

        Bazman ,

        A subset of the population cannot manage their money (and that is an a-political fact) and will end up broke and in debt whatever Govt does .

        An overlapping subset of the population can manage their money but still cannot make enough to live .

        – first step is to create a surplus of housing including social housing for and restrict immigration to bring the cost of living down .
        – second is for the state to guarantee an income but to insist they do at least 1 day workfare .

        So you don’t accuse me of being a “tory” again I’d just like to go on record and say that the people at the bottom of the foodchain are not responsible for the state of the nation , it’s the people at the top .

        Perhaps I don’t see the wood for the trees , can you enlighten me please ?

    • uanime5
      Posted February 11, 2012 at 4:00 pm | Permalink

      Unless you can provide a job for everyone who can’t claim benefits expect an increase in crime. Most people prefer crime to starvation.

      • A different Simon
        Posted February 12, 2012 at 1:02 am | Permalink

        Here are a number of useful projects that we could undertake as work programs :-
        – reduce leakage from gas pipelines
        – reduce leakage from water pipelines
        – introduce dual stream reticulation into houses : potable and non-potable water .
        – build reservoirs
        – direct water from road gutter into reservoirs instead of sewers which get overwhelmed and spew raw sewerage into rivers .
        – build social housing (which can be run to pay for itself and generate a small surplus to build more houses)
        – build solar panels

        I’m sure you can think of other programs which would endow people with a wider range of skills but there are plenty of things we could do like the above which would prove cash neutral at worst .

        • Bazman
          Posted February 12, 2012 at 10:46 am | Permalink

          People on the dole with no qualifications are going to carry out the type of engineering and building work that requires the skills needed to repair gas pipelines, reduce leaks? What? and other civil projects? Even if you found anyone with these skills to work for free where would the money come from to buy the materials?
          You would not even be able to build a garden shed with this scheme.

          • Richard
            Posted February 12, 2012 at 4:40 pm | Permalink

            You’ve not heard of “training” then Bazman

            It’s where people with skills that are no longer in demand gain new opportunities by aquiring skills which are in demand.

          • alan jutson
            Posted February 13, 2012 at 8:44 am | Permalink

            Bazman

            Apart from Training there is always work for some unskilled people on any project, if they are willing.

    • Bob
      Posted February 11, 2012 at 11:39 pm | Permalink

      With the savings on benefits the the govt could afford a return of police patrols on the streets, preventing crime instead of just recording it.

      Jobs could be made available for everyone able to work, and we would have the cleanest streets and cleanest hospitals in the world.

  17. Peter Day
    Posted February 11, 2012 at 9:50 am | Permalink

    John

    I would be very interested to hear your take on this piece about Winter Fuel allowances.

    http://www.if.org.uk/archives/1590/the-winter-fuel-allowance-why-young-people-should-get-hot-under-the-collar

    Are you another of those conservatives whose free-market and reason-based credentials mysteriously evaporate when defending the privileges of your base, or against the realpolitik of elderly votes?

    • Tedgo
      Posted February 11, 2012 at 3:27 pm | Permalink

      As a pensioner, with a very modest pension, the income tax I pay more than covers the fuel allowance I receive. It would be better if the fuel allowance was built in to the state pension to stop these envy arguments.

      I object to paying taxes to support other peoples children through universal child benefit.

  18. Electro-Kevin
    Posted February 11, 2012 at 9:54 am | Permalink

    Quite clearly the weather pattern has moved on by two months.

    Summer doesn’t arrive until mid September, Winter doesn’t really set in until February…

    My young lads asked why we go on holiday in Summer and not Autumn. They have never known an sunny Summer.

    We may not be able to reset our calendars to suit our holidays, but surely we can reset our energy planning now ?

    • Electro-Kevin
      Posted February 11, 2012 at 9:55 am | Permalink

      ‘scuse capitals for seasons. :-s

  19. Peter Day
    Posted February 11, 2012 at 9:57 am | Permalink

    Interesting you haven’t once mentioned the role of suppliers in this. Their collusion against the consumer has went unchecked for years.

    I’m obviously not against companies turning a profit, but given that the recent record profits of the big five have come so obviously at the expense of struggling families, what should the role of the regulator be here? (genuine question – I really don’t know)

    • oldtimer
      Posted February 11, 2012 at 3:01 pm | Permalink

      If you check out what happened when the electricity supply industry was denationalised, you will discover that electricity prices went down. Among other things, IIRC, the CEGB included replacement cost depreciation in its cost structure as a means to inflate reported costs and reduce its reported profits; there was also the “dash to gas” as N Sea gas came on stream which also helped reduce costs. Today the government is requiring suppliers to include renewable obligation costs to all our bills. These renewable costs, as many have observed, are useless, ineffective and unnecessary because they fail to deliver either the energy capacity or the savings in CO2 that we are assured is necessary to save the planet! We live in cloud cuckoo land.

  20. frank salmon
    Posted February 11, 2012 at 9:58 am | Permalink

    Under Gordon Brown manufacturing fell from 22% to 12% of the economy. He all but halved it. A far worse record than Margaret Thatcher who mainly closed subsidised, union dominated industries suffering structural decline.
    The over valued pound and government investment in the income stream from banking caused the Brown decline, but the minimum wage, climate change levy and 30% increase in national insurance added to this burden. Now the increase in VAT and more climate levies against business. Manufacturers are closing because they can’t afford the business rates, the fuel prices, the labour costs, the VAT or the climate change levy. And this government, a right wing government and supposed champion of small business, simply doesn’t care.
    Now Cameron wants quotas for women in business, irrespective of ability, and he is championing the bankers like Labour did. Is he Gordon Brown in disguise?

    • uanime5
      Posted February 11, 2012 at 4:05 pm | Permalink

      Manufacturing has been in decline because too many Governments have been pandering to the financial sector, such as the City, while doing nothing to help manufacture. Also the lack of engineers in senior roles in manufacturing companies has lead to poor management.

      Minimum wage hasn’t had any effect on manufacture as it’s lower than the minimum wage in most Western European countries. Though a strong pound did make our exports less affordable.

      • Bob
        Posted February 11, 2012 at 11:41 pm | Permalink

        uanime5
        Do you have any commercial experience?

      • frank salmon
        Posted February 12, 2012 at 11:33 am | Permalink

        Minimum wage always plays a part. Yes it can be too low to be effective, and this is possibly the case, but out there there are some people willing to work for less than the minimum wage and there are some employers who will to take them on at that rate. If two consenting parties agree, I don’t see why they shouldn’t be allowed to proceed. In another blog, John has said that the Greek minimum wage cut of 22% is too much. I disagree. It should be abolished. Then all those on minimum wage would be free to renegotiate their contracts in the their entirety. For some, there would be no fall in wage, for others, falls of less than 22%. And for yet others, falls of more than 22%….. That’s markets for you, but it it, I assure you, better than the alternatives.

  21. Brian A
    Posted February 11, 2012 at 9:58 am | Permalink

    A very informative and sensible analysis. However, I fear you will be not be taken sufficiently seriously by the ‘greener than thou’ zealots in Whitehall and most parts of the government. Why a supposedly Conservative-led government should actively seek to impoverish its population through an unthinking adherence to a contentious ideology is a mystery to me. It is usually overtly socialist governments that engage in the destruction of wealth and competitiveness on this sort of scale.

    • Pericles
      Posted February 11, 2012 at 3:37 pm | Permalink

      This Conservative-led government of which you write, Brian A : which one ? I used to refer to the present Prime Minister as Mr. Heath Mk. II but, on reflexion, realize that was grossly unfair — to Edward Heath.

      At least Mr. Heath, as he then was, could boast a creditable war record and a few victories in yacht racing.

      ΠΞ

  22. John Page
    Posted February 11, 2012 at 10:06 am | Permalink

    Tax & levies everywhere, then.

    Energy companies must break out the renewables obligation etc on bills so that we can see what dated government greenery is costing us. Is it true that our neighbours’ solar panels are costing us £26 a year? Wind turbines are just the most reviled example. Who still believes this CO2 stuff anyway?

    Two overtly political points.

    1. Mr Clegg, he of the pious moral frown, should be reminded often that a certain Mr Clegg often asked questions in the last parliament about fuel poverty, in a campaign that was judged effective. How much fuel poverty is his DECC causing?

    2. On Thursday’s Daily Politics a Green Party member supported landfill tax and EU fines on the basis that they help the environment. We all want a cleaner environment, but is that the best use of the money? Greens need to be challenged on priorities.

    Finally, to make serious inroads on our energy costs we need to encourage exploitation of shale. In comparison everything else is tweaking.

    • A different Simon
      Posted February 11, 2012 at 2:01 pm | Permalink

      John Page ,

      Whilst I think the Greens are misguided most of the time I do support a landfill tax .

      Municipal solid waste can be gasified at high enough temperatures to destroy dioxins and generate syn-gas . The syngas can be used to power reciprocating engines and the exhaust used to power a steam engine/turbine
      (Henry Ford did this combined cycle in 1910 to generate electricity for this factories albeit using coal instead of waste as a feedstock) .

      If the syngas is further cleaned up it can be used to drive a turbine or even to produce syn-diesel or feedstock for a chemical works . Air Products are actually doing this in Tyneside !

      Far better than incineration .

      It’s no exageration to say that we have almost run out of landfill . A Belgian company , Group Machiels is actually mining old rubbish tips ! I’d invest in them but they are privately held .

      Another company is starting to do this in Mexico and is concentrating on old automotive tyres .

      As usual Britain is Trailing the World in what matters .

      We should be looking somewhere other than at Oxford PPE graduates to find the right skills set for running a country in the 21st century .

      In short they developments are assigning a positive cash value to solid municiple waste once it has been collected and sorted ; turning it from a liability to an asset .

  23. Alan Wheatley
    Posted February 11, 2012 at 10:07 am | Permalink

    “High energy prices here do not stop the fuel being burned, they just divert the burning to cheaper countries who are not imposing these levies, taking industrial activity and jobs away from us.”

    Oh so true. Why is it that those who have a genuine concern about the environment act in a way that makes things worse? It looks like obsessive behaviour where common sense does not play a part.

    The same can be said about welfare reforms in farming. More obsessive behaviour, making things worse not better.

  24. Phillip Downs
    Posted February 11, 2012 at 10:16 am | Permalink

    Such a balanced and common sense post. I cannot understand why you appear to be ignored by your colleagues and do not have a more prominent role in government.

    After waiting for so long for the calamity of the Labour years to come to an end this coalition government experiment is proving to be such a disappointment that Labour may just as well still be in power. As regards energy pricing and tax, you are absolutely correct about exporting carbon production. Does nobody in government understand simple cause and effect. Beggaring our own people to appease the green gods will not save the planet.

    The high cost of fuel, largely caused by government intervention, is a massive problem for us. I know you are aware, Mr Redwood, that we re getting very angry. Every day, much like before, we appear to be beset by more fiddly and daft suggestions from the government. I fear your party will reap the whirlwind at the next election if something doesn’t change soon.

    • Robert Christopher
      Posted February 12, 2012 at 12:05 am | Permalink

      “Such a balanced and common sense post. I cannot understand why you appear to be ignored by your colleagues and do not have a more prominent role in government.”

      You know that you have answered your own question!

  25. StrongholdBarricades
    Posted February 11, 2012 at 10:25 am | Permalink

    Very good if complete.

    I wonder about some of the comparative figures considering that the UK has to import the majority of it’s energy, but some of those other countries fairly obviously do not.

    No arguement about tax rate levies, but someone is actually going to have to stand up in parliament and go on the record to state the true picture of the legacy of PFI, the failure of the regulatory system, and then maybe someone will go to gaol.

    The country could then attempt to move n.

  26. Thomas Hobbes
    Posted February 11, 2012 at 10:29 am | Permalink

    Another excellent analysis Mr Redwood although you did miss an obvious elephant in the room, which is that wind power for all it’s subsidies is hopelessly ineffective. On the 6th Feb in the midst of the first cold snap in the UK, at a peak energy time wind contributed just 0.1% to the UK’s energy output. (see http://autonomousmind.wordpress.com/2012/02/06/taking-the-wind-out-of-their-sails/)

    The windfarm subsidy is a scandal which must be corrected before any other areas can hope to get a look in and a sensible energy mix re-created.

    • sm
      Posted February 11, 2012 at 3:09 pm | Permalink

      Imho a snapshot not representative of power over a period of 1hr look at the 24 hr period or longer period not shown.

      http://www.bmreports.com/bsp/bsp_home.htm

      Yes individually intermittent but 20% of nameplate capacity is probably closer on average.Remember even coal/nuclear/gas plants go offline for maintenance and need some system level backup.

      We as a small/high density country should benefit from a more grid infrastructure including pump storage sites e (like Dinorwic). That must make sense in todays economy why just QE for banks and not real infrastructure.

      Wind power also reduces imports going forwards,it is a lower marginal cost when productive.Economies of scale should s enable susbidies to be removed/reduced. Our demand/supply matching technology are catching up. Nuclear power decomm liability is approx £57billion.

      Imho biggest scandal is the effect of devaluation on imports prices and taking probably perfectly good coal plants offline by limiting the annual hours useage. Wind subsidy not that far off from gas/coal. Nuclear who knows how much the real subsidy is!

      Even now in the cold snap we were exporting via the interconnectors.

      http://www.bmreports.com/bsp/bsp_home.htm

  27. English Pensioner
    Posted February 11, 2012 at 10:30 am | Permalink

    I am getting very concerned about the possibility of major electricity cuts should this cold weather persist or if we have cold weather during the next few winters. Contacts in the industry tell me that quite frequently supplies are on a “knife edge” and fee that they have been lucky not to have a significant breakdown. There is no “new-build” of power stations, many of the present ones are due for closure with quite old equipment. There is an increasing demand for electricity in spite of all the fuss about low energy lamps and the like. Presumably all these new houses that are going to be built will want electricity (and other services), but there is no indication of any corresponding increase in our infrastructure which will take much longer to build than houses.

  28. Bernard Otway
    Posted February 11, 2012 at 10:52 am | Permalink

    JOHN
    READ MY LIPS
    THERE IS NO WARMING
    proven by recent figures showing it stopped in about 1997,in fact a COOLING is predicted based on previous figures,maybe even a mini ICE AGE.
    The last eruption that happened in Iceland which caused such Aircraft disruption, actually in
    that few days NEGATED mankind’s entire carbon saving for the PREVIOUS FIVE YEARS.
    Mount PINATUBO in it’s eruption in 1991 was measured by the US geological service study
    and monitoring of that eruption,which was very large for about 11 days only then intermittent for nearly a year ,to have put into the atmosphere as much pollution including
    CO2 as MANKIND HAD IN TOTAL SINCE STARTING TO BURN FOSSIL FUEL thousands of years ago. This global warming CON TRICK is the biggest scandal of all time
    and most people are foolish enough to allow it.

  29. Acorn
    Posted February 11, 2012 at 11:01 am | Permalink

    Mr Huhne is (sorry was) paying 9.76 p/kWh for electric and 4.81 p/kWh for gas, but Cam gets a better deal at number 10; 8.7 and 3.0 p/kWh.

    http://www.carbonculture.net/orgs/decc/whitehall-place/

    You would have thought that with all the energy geeks in DECC, they would be getting the best deal in the country.

  30. A different Simon
    Posted February 11, 2012 at 11:37 am | Permalink

    John ,

    I know for a fact that companies have halted UK shale exploration because they don’t know whether the Govt is serious about supporting it or opposing it .

    This is not just down to the hydraulic fracture stimulation ban . They won’t even drill vertical exploration wells at a cost of perhaps £8m/well until the govt can convince them that it is serious .

    I’m happy to wager that France which banned hydraulic fracturing will see the sense of resuming fracturing and shale exploration before the UK .
    France doesn’t have anything like the UK’s access to conventional oil and gas .

    Argentina doesn’t even need the Falklands oil (if it materialises in quantity) , their shale plans are far advanced !
    Where it really matters Mrs Kirchner is getting it right whilst Dave is getting it hopelessly wrong .

    Major oil companies only get involved with oil in remote places ; centre of Australia , middle east , offshore , not densely populated areas .
    Onshore development in Europe requires a lot of handholding , liason with people and in the case of unconventional a lot more wells .
    Majors and super-majors are not suited to this type of work so it is best handled by niche companies .

    We had Thorium reactor programs which relied on public funding . If you are going to spend public money on anything then that would have been the place to spend it , not HS2 .

    A thorium reactor can be much more versatile than a uranium reactor . It can be throttled and not just run flat out . Thus it can be used to provide the heat for a turbine and power an aircraft .

    Now these programs are moving to China where they find a country run by sympathetic engineers who understand what real investment is and have realistic appreciation of the returns .

    Thorium reactors and shale John please .

    Nigel Lawson is right about disbanding DECC . The boundaries between Govt and the renewables and nuclear industry and associated accountancy,banking and legal industries have become blurred to the point where the workers interests are absolutely aligned with the existing vested interests .

    The rest of the world is laughing at us because we are making fools of ourselves !

    • oldtimer
      Posted February 11, 2012 at 3:03 pm | Permalink

      Via my MP, I received a letter from Mr Huhne stating they were not following up on thorium reactors.

    • APL
      Posted February 12, 2012 at 8:54 am | Permalink

      A different Simon: “It can be throttled and not just run flat out .”

      In what way does throttling differ from the moderation rods that are inserted into a conventional fisson reactor core to regulate the reaction?

  31. David John Wilson
    Posted February 11, 2012 at 11:42 am | Permalink

    We have lots of weather every year. It has included cold and snow for thre winters now.

    More seriously we need to look at how our energy is taxed. Rather than adding levies VAT on gas and electricity should have been raised. However in the case of fuel for vehicles the opposite should be done. The rate of VAT should be reduced and the duty increased by a comparable amount. This would have the effect of reducing prices for remote areas as VAT would not be applied to the extra costs of delivery etc. Howwever as usual the government adopts the solution of special discounts for the remote islands which involves extra costs in administration.

    Why is every problem solved by an extra tax or grant rather than an adjustment to an existing one.

    The lack of progress on using water power to generate electricity across the spectrum is very worrying. The government should be putting some pressure on faster progress in the use of tidal energy. What worries me much more is the number of weirs with water rushing over them that there are around the country. Many of these could be used to generate electricity cost effectively. To install turbines is much cheaper per kilowatt generated than wind turbines. Only the other day we were reading in the press about the weir on the Loddon that had been reconstructed to include a fish pass. Installing a turbine at the same time doesn’t seem to have been considered.

  32. Mazz
    Posted February 11, 2012 at 11:43 am | Permalink

    The Government will jump on any bandwagon if they see an excuse to stick a tax on it, e.g. the ‘global warming’ scam. Even when it’s been proved that the, so-called, ‘science’ has been discredited, they turn a blind eye to it and carry on, business as usual, never minding the economic poverty it puts small businesses into. They only look after the ‘Big Boys’.

  33. Single Acts
    Posted February 11, 2012 at 11:47 am | Permalink

    A very good analysis indeed.

    I presume you and like-minded tories will vote against future tax increases in energy prices ? Otherwise it’s just talk.

    (Yes, I know one of the increases was postponed, but cancelling an increase is not a cut).

    reply: I did not vote for the Climate Change legislation and stand ready to vote for cheaper energy.

  34. Johnny Norfolk
    Posted February 11, 2012 at 11:51 am | Permalink

    I wish you were a member of the government.

  35. Damien
    Posted February 11, 2012 at 11:55 am | Permalink

    I am happy to see that you continue to raise the need for lower energy prices for residential and business purposes and expose how much higher energy costs we pay compared to our neighbours and competitors abroad.

    The 2012 Irish Finance Bill was released yesterday which includes a provision to reduce VAT on district heating systems (residential & business) from 21% down to 13.5%.
    http://www.finance.gov.ie/documents/publications/finance%20bill%202012/listitems.pdf

    The BBC news reported ‘Mr Trump also writes in his letter: “Taxing your citizens to subsidise wind projects owned by foreign energy companies will destroy your country and its economy.”Jobs will not be created in Scotland because these ugly monstrosities known as turbines are manufactured in other countries such as China.
    “These countries are laughing at you.”

  36. Woodsy42
    Posted February 11, 2012 at 12:06 pm | Permalink

    “Business department on offsets or subsidies to the energy price for large process industry, ”
    All this does is pick some lucky winners from established large industries, it disincentivises innovation and acts against smaller or niche business. Basically it’s a rerun of everything that is wrong with the social benefits system but landed on commerce.
    The stupid and useless taxes need to be removed across the board.

  37. David Price
    Posted February 11, 2012 at 12:14 pm | Permalink

    Where do the figures for the “Climate change levy imposes an extra 1-6% on gas bills, and an extra 2-5% on electricity bills” come from?

    When I checked my British Gas bills last year they showed climate levies of 4% on gas and 12% on electricty which differed from other suppliers. When I asked if this was a statutory tax, and how it was calculated I was not given a consistent or straight answer despite 5 times of asking.

    I checked my online bill again this morning to find that BG now lists “Government obligations and taxes” which includes “Green Levies and Social Support” as 10% for gas and 19% for electricity.

    So the situation appears to actually be 2-4 times worse than your numbers suggest.

    reply: Mine came from the official source cited.They are the figures for industrial.

  38. Neil Craig
    Posted February 11, 2012 at 12:28 pm | Permalink

    Thank you for introducing me to the Digest of UK Energy Statistics which I had not previously seen. They have chapters on coal, gas, oil & renewables but none on nuclear which shows the blinkered nature of government thinking. Like doing a digest of transport statistics and avoiding mentioning cars.

    I don’t know exactly what electricity costs elsewhere but we produce about 3 times more GDP per kwh than China which, the laws of supply and demand being what they are, suggests their costs cannot be more than 1/3rd of ours. China now consumes about 1.6 times as much electricity as the entire EU http://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption which bodes well for them and ill for us.

    Around 93% of the cost of electricity is various sorts of state regulatory parasitism (mandating that we build windmills rather than cost effective nuclear, the nuclear regulatory morass that produces the majority of the cost of nuclear; said regulatory system preventing the mass production of off the peg reactors and consequent economies of scale).

    ECONOMIC FREEDOM + CHEAP ENERGY = WEALTH

    China’s government encourages that. Ours, despite the energy advantages you name and the superior engineering expertise we still have. very actively prevents it.

  39. Francis Irving
    Posted February 11, 2012 at 12:41 pm | Permalink

    “Given our vulnerability to weather even in an era of global warming” – not sure what the “even” is doing their, John. “Global warming” is perhaps the worst named concept ever – it means that the *overal global average* increases, and that individual places become more chaotic.

    There will be more energy overall in the system, meaning more variety and change. So what you call “weather” will indeed increase – it’ll generally get more complicated and extreme.

    Anyway… Basically you’re right that a unilateral carbon price won’t reduce emissions, it’ll just mean we buy less oil so it becomes cheaper in other countries, and they pay more. Only real way out is for any country (or better block of countries, e.g. EU) who imposes a carbon price, to impose similarly estimated import duty on companies who don’t pay the price.

    And of course, reduce taxes on thing like labour so the overall tax burden stays the same.

    Finally, other source of energy are *very very* important for keeping energy cheap long term. We’re collectively incredibly rich now, and should be investing loads more to get really good at nuclear, wind, fusion, as well as saving energy with electric cars, CHP…

    Easy to get oil and gas are limited, and there’s increasing competition for them. At some point something else will become better – and whoever (individuals, countries or businesses) that is ready for that will make a fortune.

    • BobE
      Posted February 11, 2012 at 6:39 pm | Permalink

      We sit on 400 years of coal. Coal is easily converted to gas and can be used to make oil. Wind power is just a joke, or a gravy train.

  40. Pericles
    Posted February 11, 2012 at 12:54 pm | Permalink

    I agree with me.  When I say me, I mean not myself but the user of ‘me’ as pseudoplume (or nom-de-nym).

    But, Mr. Redwood, me doesn’t go nearly far enough.  It is high time those with the intelligence to realize it – hardly numerous in the body politic, I grant you – stopped pussyfooting around the subject of anthropogenic climate change:  it is the largest fraud ever perpetrated and those with eyes to see must so describe it.

    ΠΞ

  41. Bob
    Posted February 11, 2012 at 1:10 pm | Permalink

    Is Mr. Cameron’s windmill and solar panel keeping his house heated?
    Can we have a update please?

    • Denis Cooper
      Posted February 11, 2012 at 5:42 pm | Permalink

      A neighbour put up a wind turbine, and whenever I go past that house I always look to see what it’s doing. More often that not it’s stationary, and it certainly won’t be turning and helping to keep them warm today.

  42. Quietzaple
    Posted February 11, 2012 at 2:49 pm | Permalink

    How dimly trolling is it to ignore the weakening of the North Atlantic drift and associated milder weather?

  43. Atlas
    Posted February 11, 2012 at 2:54 pm | Permalink

    John,

    RE: Global Warming

    With all the years that this has been in the public eye, have you formed an opinion as to the validity of the scientific claims? After all, all these energy ‘actions’ are supposed to be predicated on Global Warming (GW) due to CO2 being true; and if GW is not true then there are other approaches to our energy needs that could be taken.

  44. Martin
    Posted February 11, 2012 at 2:56 pm | Permalink

    You mentioned shale gas. Not sure how the Nimbys will like that!

    Re your blog yesterday comparing the USA and UK – to what extent has the US economy improved because of US domestic production of shale gas?

    • Robert Christopher
      Posted February 12, 2012 at 12:13 am | Permalink

      “Not sure how the Nimbys will like that!”

      So why bother telling us?

  45. Sue Doughty
    Posted February 11, 2012 at 3:19 pm | Permalink

    Global Warming my cold foot! I paid my carbon taxes but we still have snow events. This is so unfair!
    But seriously, I always knew Britain paying more tax would not affect the weather. It is the sun that makes the weather, puny mankind doesn’t get a look in. Can I have a tax rebate for this snow? Please?

  46. oldtimer
    Posted February 11, 2012 at 3:22 pm | Permalink

    On Friday, Sir David King, former Chief Government Scientific advisor appeared before the Public Administration Committee (with Lord Rees) to talk about the formation of strategy in Government. They appear from about 49 minutes in. It was evident from Sir David King`s remarks that he is convinced about (a) global warming and (b) the need to decarbonise the UK economy. That was his advice to the UK government and it is, it seems, the advice they still follow. He finessed his remarks by saying that many global economic crises resulted from sharp increases in the price of oil, that high prices were, most likely, here to stay with the growth of China and India. Therefore, he concluded, it was necessary to push up the price of fossil fuels in the UK to discourage their use. So it is official. Higher and higher fossil fuel prices continues to be a key plank in Government policy.

    He omitted to mention that we already endure some of the highest taxes in the world on fuels such as petrol and diesel – as you point out. There is, therefore, a conflation of two issues – the contentious issue of CAGW (though these days that masquerades under the more innocuous name of climate change) and the non-contentious issue of the need to secure long term ebergy supplies. It is curious, is it not, that the way the Coalition (and the previous Labour) government has gone about its green energy policy defeats the very objects it claims to serve (ie of reducing CO2). As I commented in reply to an earlier poster, we live in cloud cuckoo land.

  47. Epigenes
    Posted February 11, 2012 at 4:07 pm | Permalink

    Mr Redwood, if Mr Huhne goes to jail as a result of a conviction for ‘perverting the course of justice’ will you be holding a party on the HoC balcony overlooking the Thames? If so, any chance of me being invited?

    Reply: Everyone is innocent until proven guilty. I have no party plans.

  48. uanime5
    Posted February 11, 2012 at 4:27 pm | Permalink

    The reason why the price of petrol and energy is lower in the USA is that they have poor healthcare, educational, and welfare. As a result compared to the UK they have a higher rates of infant mortality and a large number of sick people who can’t afford treatment, a larger number of uneducated people who become criminals because they can’t get jobs, and require a large number of soup kitchens for the larger number of homeless people. The low cost of petrol and energy in the US results in far lower living standards for most Americans.

    China has low energy costs partially because their labour costs as lower. This means that it will always be cheaper in China to mine coal and run power plants than in the UK. Just as labour intensive manufacture was outsourced to countries with low labour costs high energy, low skill manufacturing will be outsourced to countries with cheap energy and labour. The solution for the UK is to attract more manufacturing which requires highly skilled staff, rather than futily trying to be cheaper than China.

    Reply: The Us spends considerably more on health care than the UK and has some very good care.

    • Bazman
      Posted February 11, 2012 at 7:47 pm | Permalink

      For the minority it seems.

    • Tedgo
      Posted February 11, 2012 at 8:33 pm | Permalink

      What we really need to do is apply import duty on a country by country basis. The level of duty should reflect each countries wage rates, lack of free health services, lack of free education and lack of pensions. Damage to the environment would also be a factor.

      Rather than us trying to turn the clock back 100 years we should protect our way of life.

    • Richard
      Posted February 12, 2012 at 4:32 pm | Permalink

      As the USA has 5 times more citizens than the UK then its not really a surprise that the numbers you describe are higher then the UK
      Having travelled a lot in the USA over the years I dont recognise the poor welfare, poor health care and poor standard of living you describe.
      It is Europe that is suffering reducing standards of living.
      And I don’t understand the correlation between low enrgey prices and poverty you state.
      In reality low energy prices benefit the poor as they spend a larger proportion of their income on gas, electricity and petrol than rich people

  49. Keith Peat
    Posted February 11, 2012 at 5:20 pm | Permalink

    So far as green taxes. Huhne et al. Well this goes back to Cameron allowing Murdoch’s Sky Tv to bully him into a live US style debate which the Clegglet won. Never must we allow that to happen again in this country. We do not have a two party presidential system here. There is a difference in voting for a government and a president.

    It is also a false economy to hammer drivers, not only via the pumps but in masses of costly control too. The economy would collapse without them and they are a 30,million voting block.

    As it happens, UK’s car drivers only produce about 0.28% of all man made CO2 which is a natural gas anyway.

  50. cosmic
    Posted February 11, 2012 at 7:27 pm | Permalink

    While we have an energy policy based on a legal obligation to decrease carbon dioxide emissions, but with no regard to costs, engineering realities, or effectiveness (as you point out, it often just drives emissions overseas to more compliant regimes), we struggle along with a self imposed ball and chain. This is quite likely to have very severe social as well as economic consequences.

    There isn’t much option but to remove the legislation concerned with CO2 emissions and develop a rational energy policy forgetting the obsession with CO2. Anything else is just tinkering round the edges.

  51. outsider
    Posted February 11, 2012 at 8:20 pm | Permalink

    Dear Mr Redwood, you point out that pre-tax prices are relatively low in the UK and pump prices relatively high because our tax is so high. This is exactly as one would expect because, under market forces, part of the tax burden is bound to fall on the supplier not just the consumer. And this has consequences. Several UK oil refineries have closed in recent years. One is now in administration and another found no takers when put up for sale.
    As the plight of Petropolis suggests, refineries are almost as hard-pressed across Europe, though not because demand has fallen. The new refineries are being built in Asia. Why? Well, demand is rising fast there but also taxes are low and therefore refinery margins are much wider. Thousands of jobs are being lost in the UK oil industry because of the high tax, let alone jobs in user industries.
    And we should not be surprised if there are more occasional shortages of diesel and petrol here in future as well as tight supply of electricity.

  52. Leslie Singleton
    Posted February 11, 2012 at 9:01 pm | Permalink

    What happened to Town Gas, Coal Gas, Producer Gas and Water Gas and that sort of thing? Fair enough, it was presumably replaced by North Sea Gas but now that that is running out, one might think that, especially with all the engineering progress of the last 50 years, we could reinstate it. Why not a new generation of gasometers to use the coal that we have in plenty?

  53. matthu
    Posted February 12, 2012 at 10:14 am | Permalink

    Bishop Hill reproduces a letter with the permission of Professor Brice Bosnich, a retired chemist and a fellow of the Royal Society. He sent it to Paul Nurse on his election as president of the society in 2010. Nurse did not reply.

    http://www.bishop-hill.net/blog/2012/2/12/a-letter-to-paul-nurse.html

    How sad that such a polite, well-reasoned, well-referenced letter from a fellow of the Royal Society should not have been accorded even the courtesy of a brief reply.

    I hope this letter gets wider audience amongst our MPs.

  54. matthu
    Posted February 12, 2012 at 10:18 am | Permalink

    Meanwhile Paul Hudson in his BBC weather blog reports that “it is the 11th year out of the last 12 when the Met Office global temperature forecast has been too warm”.

    http://www.bbc.co.uk/blogs/paulhudson/2012/02/met-office-global-forecasts-to.shtml

    The probability of the Met Office global temperature forecast having shown the same directional bias (in either direction) in as many as 11 years out of the last 12 (if we assume that the chances of an error in either direction is equally likely) is about 0.0063 i.e. this is a highly significant result and confirms the existence of bias.

    This is on a par with the Met Office’s bizzare claim that the probability of the UK experiencing another winter as cold as those we have been experiencing recently is roughly 1/20 and is independent from one year to the next

    They really don’t have a clue and this is now being confirmed statistically.

  55. Mactheknife
    Posted February 12, 2012 at 12:35 pm | Permalink

    John

    I’m afraid we are going over old ground here, and I have posted comments on numerous occassions pointing out that the UK ennergy policy, in particular the “green” part, is absolutely suicidal for consumers and bsuinesses alike. I’m afraid Huhne and his chums at Greenpeace, WWF etc have been allowed to dominate the agenda with little restraint from No 10 or No 11. It even seems that Cameron has bought into this green faux science so obviously Huhne thought it safe to push on with his policies.
    Governments around the world are offering hundreds of billions of dollars in research grants for anything “green” and follows the edict of the IPCC, so it is little wonder the scientists with vested interest sometimes “manipulate” their finding to get the right result. If you are in any doubt about the corruption of science in the climate world I would recommed a couple of books as a starting point. Andrew Montfords “The Hockey Stick Illusion” looks at the way Al Gores infamous hockey stick graph which became the clarion call for the Warmistas, is produced using highly disputed and manipulated data and statistical methods which do not stand up to scrutiny. The second is by Donna Laframboise called the ” The Delinquent Teenager” which is an expose of the the IPCC, its reliance on grey literature as opposed to peer reviewed, its use of low qualified scientists, the inflitration by activists such as Greenpeace, WWF etc.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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