To me the biggest single political issue that angers and worries people is energy prices.
Every time you go to the pump to fill your car, every time the Gas and Electricity company sends you a statement or quarterly bill, you get a nasty shock. Super greens may tell us to wear thicker woollies, or to get on a bike. For many busy families there is no option but to take the car to work, to use the boiler for hot water and central heating and the cooker for daily household chores. Paying the bills leaves many short of cash for other items. It is an important part of the squeeze on spending we see in the shops.
The impact on industry is at least as bad. If you make cement, fire iron and steel, bake tiles and ceramics, run extensive automated plant, produce chemicals, forge parts, manufacture glass and a host of other manufacturing processes, you need to use loads of power. Of course leading firms work away at less fuel intensive processes. They find ways to cut kiln times, ways to insulate and to reuse waste heat. They seek out methods which cut their power bills as much as possible. They would do all that even if our energy prices were lower.
The problem is the EU green and renewable policies, and carbon tax policies do not apply to competitor companies in places like China, Korea and India. The EU may succeed in cutting fuel use here, but at the expense of exporting manufacturing jobs elsewhere. The fuel still gets burned, but not in our part of the world. More employment and value added has been lost. Goods may be produced with less fuel efficient processes as a result.
I am glad the government wants to encourage more manufacturing here. It is depressing in our shops to see just how many things we once made here are imported from emerging economies. Tempting companies and entrepreneurs back, or persuading new ones here to challenge the new masters of industrial output will require amongst other things a more benign energy policy.
More than ten years were lost recently by a government which would not make up its mind and define an energy policy which works. This government needs to get on with it. We are told they are trying to find a way of allowing cheaper energy for manufacturing. Why not look for cheaper energy for all? Politicans rightly worry about fuel poverty, people who find fuel costs are too high a proportion of the total. Wouldn’t it be better in our current situation to solve that with chepaer energy, rather than offering more benefits taxpayers can scarce afford?
The EU wants us to scrap all our old coal stations. Domestic pressures will lead to the closure of many of our older nuclear stations. That means there is a lot of capacity to replace. Combined cycle gas is the cheapest and quickest way of doing that. Isn’t it time to get on with it? Some I am told is now going to be commissioned. Wouldn’t that send a message the UK is open for business? Wouldn’t it also reassure a little the elderly and those on low incomes who now dread the arrival of the fuel bill?
The UK needs to earn its living in an increasingly competitive world. Let carbon prices, high renewable obligations and all the rest be global agreements, not pioneering increases in UK costs that simply transfer the jobs elsewhere.