Why UK electricity is dear

My Lords, industrial electricity prices are four times the level of the United States of America’s and more than three times the level of China’s. It is no wonder that we face a disaster of deindustrialisation accelerating under this Government with the closure of the oil refineries, ceramics plants and others that the noble Lord, Lord Lilley, rightly mentioned.

This is all avoidable damage. It is self-harm on a huge scale that the Government should be ashamed of. We have signed up for dearer electricity—it was not just this Government, but this Government have signed up to it, doubled the signature and worsened the terms, making it so much worse than even the position they inherited. It was always going to be the case that, if you put on more renewables, you would have dearer electricity. It is completely wrong to suggest otherwise, because you need to pay for two systems: you need the wind power as well as 100% back-up, because on some days, particularly cold, difficult days in winter, there is no wind power at all. So you are paying twice with the back-up.

It was always going to be the case that the more renewables you put on the system, the dearer your cheapest form of energy production, which is gas generation, becomes. When you switch from gas being on baseload to gas being interruptible and brought in only occasionally when there is no wind, it works much less efficiently. The efficiency of the power station drops from over 60% to around 40%, so there will be even more carbon dioxide per amount of energy produced. Of course your costs go up dramatically, because your overhead costs for the gas power station are defrayed by a limited number of days instead of being defrayed by operating every day of the year apart from occasional maintenance. It was baked into the system that this would be less efficient and work less well.

Governments, particularly this one, have then compounded the problem by saying that gas must incur very high carbon tax charges. Of course our electricity was going to get dearer, because customers had to pay additional taxes on the gas. Why are there additional taxes on the gas? It is mainly as the noble Lord, Lord Lilley, implied: the gas was too competitive and was still cheaper even on some of the interruptible runnings that they were proposing. So you needed a big carbon tax to say to people, “This really is the dearest part of the power system, which is why we are trying to get rid of it”.

So the Government go out and sell to the public this unbelievable idea that we have uniquely dear electricity because we are producing some on gas—gas which is diminishing in volume because, when we have windy days now, there is more wind power available, so the amount on gas has reduced proportionately. They are not coming clean with the public that a series of levies and carbon taxes are the cause of very high energy prices in the United Kingdom.

The Government offered £300 off people’s bills as a lovely election offer. We all thought that that meant our bill would go down by £300, but we now learn that their down payment is £150 off a rise, so the bill still goes up. The sting in the tail, which we were not told about, is that we have to pay the £150, but out of general taxes instead of our electricity bills. For most people who go to work and pay taxes, that is no advantage at all. The Government are kidding themselves and undermining their own popularity, industry and commerce by a policy which is all self-harm.

23 Comments

  1. Bloke
    June 5, 2026

    Labour operate as tricksters but they are most often found out, as Lord Redwood examples today.
    They have minimal chance of being re-elected, except perhaps in the Makerfield by-election if Restore deducts votes from Reform UK to allow Labour in. That would be a travesty as both Reform UK and Restore have similar intentions for the improvement of the country.

    Reply
  2. Michael Staples
    June 5, 2026

    Of all Government policies Net Zero is by far the most damaging in terms of cost, employment, taxation and deindustrialisation, but is still given an easy ride in mainstream media, which maintains the fiction that we are somehow fighting a “climate emergency”. Miliband is about to bake in a host of contracts with renewable producers which will make it extremely difficult for any future sensible government to significantly reduce the price of energy to nearer those of our competitors. It is an act of national self harm.

    Reply
  3. Lifelogic
    June 5, 2026

    Well Net Zero May is very much to blame and this bill was nodded through without even a vote. Why does May still have the Tory Whip and why is she in the Lords Sunak I assume. Ed Miliband’s climate change act was voted for by all but a tiny handful of MPs including JR, Peter Lilley, Anne Widecombe. This lunacy was never undone by Cameron, May, Boris, Sunak or Sunak.

    What on earth is driving Miliband and Labour are they just totally insane or do they actively want to harm the UK? What else is driving this? The policy does not even cut CO2 really let alone do anything for climate. The largest producer of CO2 in the UK is Drax burning wood (young coal) imported on diesel ships and trucks and producing more CO2 per kWH than coal and doing it more expensively and causing more environmental damage.

    So often when all the parties agree on something they are all wrong. Climate Alarmism, Blair’s moronic wars, the Common Market and EU, tax levels that are far too high, government that is far too large, the minimum wage and endless employment, tenancy and other red tape, mental health care of dangerous people in the community, no deterrent policing, two tier justice and policing, the total lack of decent defence systems, the wars on motorists, the dire NHS…

    Reply
  4. glen cullen
    June 5, 2026

    Agree Lord-J …..and don’t forget the extra costs of import energy from europe via interconnectors

    Reply
  5. Nick
    June 5, 2026

    Now the IPCC has withdrawn its extreme RCP8.5 climate scenario, any remaining reason to pursue Net Zero has vanished. It turns out to be an unnecessary policy based on false data and predictions. Its staggering social and economic costs can all be saved.

    You might think government would be eager to tell us that the scientists have recanted and there is no emergency after all. Net Zero can be replaced by a cheap energy growth policy based on our ample supplies of fossil fuel and, most importantly, we and our children are all safe.

    What is holding it back?

    Reply
    1. Lynn Atkinson
      June 5, 2026

      The Climate Scam and ‘saving the planet’ was never the reason for the hysteria. It was the excuse for the Migrant Scam.

      Reply
  6. Ian B
    June 5, 2026

    The dishonesty of a UK Parliament and its 650 MPs. Who in their right mind would choose a new direction, that is unproven in cause and effect, the so-called ‘NetZero’ aim. With the project on the one hand Parliament refused to cost-out its implications, and on the other it was logically it was going to need money, lots of money. So, what did the UK Parliament do? It first cancelled the means to earn money, to deindustrialised the Nation, it sent Industry & enterprise packing – the means to pay for the UK Parliaments dream was expelled. In effect the UK Parliament cancelled tomorrow.

    Even today little ole UK, its 650 MPs, with just 70 odd million people should be able to see that in a World of 8.3Billion all making headway, earning money, wealth and funding out of enterprise, things we cannot now even dream of, they are growing while the UK is on a downward spiral, then they surely have got it wrong. Our Competitor nations are growing. The UK’s contribution to World emissions, global warming has grown, grown exponentially all caused by the UK Parliament – it didn’t reduce emissions the increased them.

    The UK Parliament won’t recognise their failure, won’t adjust, wont deviate. Yet the evidence of getting it wrong keeps piling up. It is said if you keep making the same mistake, keep getting the same result maybe something is wrong. The UK first needs money creation, an economy, wealth all the elements that create the seed corn of a tomorrow. The UK’s 650 MPs reaction zilch its about the next election a lazy sit on hands existence and find more ways to tax. The UK’s 650 MPs are all about self and personal ego, the Minions can take a ‘hike’

    We need a General Election now

    Reply
  7. Old Albion
    June 5, 2026

    We’ve discussed this issue over and over. Miliband assisted by Starmer and the half-wits in Labour. Are willingly and knowingly destroying this country to try and save < 1% of global Co2, which will be taken up by China/USA/Russia/The Far East in weeks or possibly days.
    Even Mad Ed Miliband knows this, so he has taken to incanting 'energy security' as his reason for the destruction. Energy security! Relying on intermittent wind and solar! There is barely any Battery back-up installed.
    The whole farce is costing £trillions and has created the most expensive domestic and industrial energy in the world.
    Still Miliband ploughs ahead. We need a change of government, pronto.

    Reply
  8. Charles Breese
    June 5, 2026

    Fortunately, the private sector is developing energy transition solutions which I suspect those at Whitehall are completely behind the curve on. Examples are the use of Tech (eg Kraken Technologies https://kraken.tech) to smooth demand and create virtual power plants (combining renewables, batteries, EVs etc), and satellite technology being developed to make sun available 24/7 (Overview Energy https://www.overviewenergy.com).

    What you describe is a wonderful example of the triumph of ideology over commonsense!

    Reply
    1. Ian Wragg
      June 5, 2026

      You’ve been reading too many science fiction books Charlie Brown.

      Reply
    2. Ian B
      June 5, 2026

      @Charles Breese – yes a lot of people and their initiatives are outshining the States efforts for energy security.

      But here in the UK it is energy taxes/subsidies etc that ensures that the UK and what is left of its Industry remains uncompetitive. Its self inflicted flagellation. The high prices that Lord Redwood appears to elude too are contrived and forced on the Nation by an incompetent Government and Parliament that isn’t fit for purpose.

      All basic kindergarten stuff. To create a future you first have to earn, really earn, the money to pay for it. To earn you have to engage in commerce, the UK Government and Parliament have gone out of their way to ensure that is not on the agenda.

      Reply
  9. William Long
    June 5, 2026

    Their toleration of the multiples quoted in your opening paragraph says it all: this Government is not interested in commercial reality, but simply in its pursuit of presumed virtue by imposing ‘Net Zero’ on its subjects. It will inevitably find that this leads not to net zero carbon emissions, whatever that implies, but net zero prosperity, and if pursued much further, revolution.

    Reply
    1. Ian B
      June 5, 2026

      @William Long – ‘Net Zero’ with its trillion £ costs, that has a starting place a Government and Parliament choosing to remove, expel the means to fund it. They choose that the UK should have no future

      Reply
  10. Keith from Leeds
    June 5, 2026

    Thank you, Lord Redwood, for laying it out so clearly. It is government policy that makes our electricity and gas so much more expensive than they need to be. Why do they not understand that building two systems is a colossal waste of taxpayers’ money?
    This is not government serving the people; it is government against the people! Who voted for Net Zero and the additional costs on our energy bills? All apparently driven by one man with an unhinged obsession with the false God of Global Warming/Climate Change. A man who does not care what damage he does to the UK economy, and appears to be out of control of the PM! When will sanity and common sense return?

    Reply
    1. Ian B
      June 5, 2026

      @Keith from Leeds – this UK Parliament & Government keeps fighting the Nation and its People, they are devoid of all common sense and logic. Everything has to be paid for, to pay for things that requires earnings. This UK Parliament & Government has as it starting position the removal of the ability to earn as a Nation.

      They, the UK Government & Parliament could achieve/fulfil all their aspiration even the most ridiculous ones, if the started with money & wealth creation. They cant accept that tax the more they tax is the country ‘not’ earning tax is just money removal from the economy.

      Reply
  11. Ed M
    June 5, 2026

    Per capita, UK’s electricity generation from renewables is low / very low compared to other leading Western economies

    – Iceland’s is x 20 more than UK
    – Norway x 12 more than UK
    – Sweden x 10 more than UK
    – Canada x 10 more than UK
    – Finland x 4 times more than UK
    – New Zealand x 3.5 times more than UK
    – Austria x 3 times more than UK
    – Denmark 2.5 times more than UK
    – Netherlands 1.5 more than UK
    – Germany 1.5. more times than UK
    – USA nearly 1.5 times more than UK
    – China more than UK
    – Tajikistan more than UK

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    Reply
    1. Ian B
      June 5, 2026

      @Ed M – it seem warped to suggest any of these aspiration are anything to do with being ‘renewable’ when the funding, the taxpayer subsidies, are literally just being removed from society without consideration to the means to replenish them(the money & wealth)

      Reply
  12. Ian Wragg
    June 5, 2026

    Thanks for highlighting this problem which Milibrain i tends to make worse by rushing headlong i to approving more wind fams and solar arrays. He is baking in subsidies for 20 years to hamstring future governments.
    I hope that Reform and the tories make it clear they will not honour thesr payments, reported to be £40 billion plus by 2030.

    Reply
    1. Ian B
      June 5, 2026

      Ian Wragg – then again what Milibrain is fronting with agreement of his Boss 2TK, confirmed by the collective responsibly of those in the UK government Cabinet, then approved by the UK Parliament. Without all that support he would get nowhere – they ‘all’ own the direction taken.

      Reply
  13. Iain Gill
    June 5, 2026

    well worth looking at what Kathryn Porter has to say on this subject

    Reply
  14. Original Richard
    June 5, 2026

    Absolutely correct, Lord John. But the economic argument fails when the Communists can simply say that any cost is necessary to save the planet and the UK, having started the Industrial Revolution (remember PM Johnson said at the UN, we were the first nation to send the great puffs of acrid smoke to the heavens on a scale to derange the natural order) it is our responsibility to lead the world in decarbonisation. So the only way to combat this argument before the attack on our energy, economy and civilisation is complete is to destroy the false argument that CO2 is a pollutant and controls the climate. In fact if decarbonisation was not leading to de-industrialisation and impoverishment the Communists would not have invented a climate crisis caused by burning fossil fuels. There would only be an awareness that the planet is gently warming at 0.16C/decade as it exits the Little Ice Age. It isn’t necessary to know the science to understand that CO2 does not control temperature and climate. It is only required to examine the historical data, such as the Antarctic Vostok ice core data which shows that when both CO2 and temperature are at exceedingly low levels, as they have been over the last 450,000 years, then CO2 follows temperature. Interestingly, Al Gore in his now infamous film “An Inconvenient Truth” shows this Vostok ice core data correlation between CO2 and temperature. But he cleverly doesn’t align the temperature and CO2 graphs and then says that the “relationship (between temperature and CO2) is very complicated” but that “when there is more CO2 the temperature gets warmer”. But the Antarctic Vostok ice core data doesn’t support this, in fact when both are very low it’s the reverse, most likely as a result of Henry’s Law. Neither is it necessary to understand the science to examine the weather. Just look at the data for hurricanes etc..

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  15. mancunius
    June 5, 2026

    “The Government offered £300 off people’s bills as a lovely election offer.”

    Labour will only ever offer their benefits-dependent voters such a bribe. One that, like the horde of other subsidies available to utility customers on benefits, always comes – again and again – at the expense of the taxpayer, which increasingly includes not only workers but pensioners who were lifetime contributory workers.
    If benefits are not imminently radically culled, we face ruin.

    Reply
    1. Ian B
      June 5, 2026

      @mancunius – yes, election promises always get consumed and distorted by caveats down the line.

      Reply

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