Leaders: Energy price blame war must end

Picture: PA
Picture: PA
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If the heat being generated by the debate over energy prices could be captured, it would certainly keep a lot of homes warm this winter.

Latest to put fuel on the fire is SSE, warning that a green policy initiative is set to add an average of £26 to household bills by 2015.

The company is attempting to force public attention back on the government as the villain of the high energy bill piece. That is unsurprising, given the battering that all of the big six firms have taken following Labour leader Ed Miliband’s spotlighting of them by his price cap pledge, and the animosity towards SSE after it announced price rises of 8.2 per cent due next month.

The Chief Executive of SSE, Alistair Phillips-Davies, is quite right to bring out in to the open the need for a debate about what kind of energy we as a society want, progressive or cheap, or somewhere in the middle, in a balancing of the two.

The particular policy SSE are fingering is the carbon tax. It is intended to make generators of electricity who use carbon-emitting fuels, such as coal and gas, pay a levy, so encouraging them to move to low-carbon energy sources such as nuclear and wind. This shift cannot be achieved quickly, so the carbon tax is likely to be adding to bills for decades to come.

To some who believe that dealing with climate change is urgent, such as Lord Stern, author of the UK government commission report on the economics of climate change, to protest about the cost of green policies is seriously misguided.

He says that they have been responsible for about 6 per cent of recent price rises, with most of the rest coming from sharp increases in the wholesale cost of gas and coal.

But the concentration on green policies is having another effect. It is suggesting that they are an expensive luxury that the average household cannot afford. And if lots of people come to this conclusion, they are also liable to turn against low-carbon energy itself, which would be a big set-back in the battle against climate change.

This cannot be the result that either politicians or the companies want. More honesty in this debate requires politicians to stop seeking to win electoral credit by blaming power firms for price rises when politicians share at least part of the blame for the increases.

But because political interference can only be blamed for a small part of the increase, companies should not seek to make them the fall guys either.

Promoting low-carbon energy is going to be expensive and that has to be paid for, largely by the consumers of energy. But that is a necessary cost as we shift to a more sustainable energy policy.

Politicians and the companies need to be honest about those costs, as well as the costs of relying on fossil fuels and building new nuclear power stations. Then consumers, as voters, can decide what they want.

Merrily jingling festive tills predicted

Christmas is a-coming and shop tills are likely to jingle merrily, with about £2 billion more in spending this year than last, according to Verdict, a market research company. And why not – retailers have had a thin time over the past five years and no doubt feel that they deserve a fatter one, though Verdict notes they will still have to discount heavily to meet the demands of bargain-hunting consumers.

Reasons for the upbeat forecast are not hard to find. House prices are on the up again which, given that the home is where most people have their wealth stored, is a confidence booster.

Talk of triple-dip recession has disappeared, and while the US is producing a political pantomime cliff-hanger, the threat of a new economic crisis has moved well off-stage.

And curiously, recession itself has produced another bounce-back factor – a lot more babies are born in bad times than in good. Small children, as any parent knows, are expensive creatures and this Christmas, baby-boom parents seem to have no intention of stinting.

A slightly odder effect comes from the privatisation of the Post Office, where those members of the public who acquired shares seem likely to cash in on gains made and take the money shopping. Even odder still, banking malpractice has a hand in making people feel flush – all those mis-sold payment protection insurance policies are now producing compensation payments, which people also want to spend.

Well, everyone has been through some dark times and the clouds have hung more heavily over some than others. Now it turns out that those clouds may have a shiny tinsel lining.