Charles Moore: David Cameron May Lose Elections Over Ever Rising Green Energy Costs
The cost of living and energy prices will be the key renewables of British politics. They will be the central battleground of the next election
Most of us remember when Lehman Brothers fell on September 15 2008. It was the moment when the hubris of the global banking system, of central banks and of governments was exposed. Five years on, we are still struggling with that inheritance.
We probably do not remember another date from that year, June 8. On that day, the House of Commons passed the Second Reading of the Climate Change Bill. We are still struggling with that inheritance, too. It is part of a comparable hubris.
Both were boom-time follies. In each case, powerful people in the Western world formed an arrogant consensus that they were right, and that there was therefore no need to pay attention to the queries of the sceptic or the needs of the citizen. Costs, prices, risk did not matter, because truth was on their side. Banking and environmentalism both became priesthoods, the first often subsidising the second, both persecuting heretics. The first collapsed five years ago. The second is crumbling only now.
The banking crisis and the Climate Change Act happened at the time of a Labour government, but they both make life extremely difficult for a Conservative-led government today. This week in Brighton, Ed Miliband, who served in that Labour administration (and was actually the energy and climate change secretary who completed the parliamentary progress of the Climate Change Act) nevertheless felt free to attack the Tories as the pal of rich bankers and prisoners of the energy companies. How could he, who was one of those who got everything wrong, dare to mount such an attack? Partly, no doubt, because he does not recognise his own role in the double catastrophe, but also because he knows how deeply implicated the Tories are.
On June 8 2008, only five Members of Parliament – Christopher Chope, Philip Davies, Peter Lilley, Andrew Tyrie and Ann Widdecombe (all Conservatives) – voted against the Climate Change Bill. They are worth naming, I think, because “the Five Members” who defied executive fiat in the 1640s have an honoured place in our history. The modern Five Members, four of whom are still MPs, should be honoured too. But all the other Tories – nearly 200 of them – voted for the Bill, led by an enthusiastically green David Cameron.
The key error of the Climate Change Act was not, of course, to worry about the pollution of the world and to seek to encourage sources of energy other than fossil fuels. Any sensible government would consider such things. It was to enforce alarmist timetables and to load the consequent cost on consumers. Mr Miliband is right that energy prices are shockingly high. One of the biggest reasons for this is that, thanks in good part to him, the price of renewables, instead of being a tax, is stuck on each bill. The wholesale price of the cheapest form of power (from coal-fired power stations) is a third of the “strike price” for offshore wind. The consumer pays the difference, by law.
What this means is that energy prices will go on rising for at least a generation. What that means is that the most unavoidable element in any household’s cost of living will make that household poorer each year for the foreseeable future. And what that means is that any incumbent government will find it extremely hard to get re-elected.
So, although Mr Miliband’s new promise that a Labour government would forcibly hold energy prices down is insane, it is – as insane ideas go – more immediately pleasing to the voter than the current, also insane, alternative, which is that government forcibly puts them up.
This weekend, then, Mr Cameron finds it hard to know how to respond. Obviously, he should not steal the mad Miliband policy. Obviously, he should spell out why it is mad. But he cannot easily do so, since he is complicit in the madness which has brought it about. They are all in it together. Even as he tries to work out his party conference speech for next Wednesday, his Government is pushing hard in the House of Lords for its own Energy Bill which, among other things, establishes a “merit order” for power-users. This insists on the use of renewables first, thus putting cheaper sources of power into compulsory second-place and discouraging new investment in them.
If Mr Cameron wants support for a change of policy, though, he can find it in yesterday’s report from the Intergovernmental Panel on Climate Change (IPCC). You would not know it from the way it has been covered – the BBC’s Today programme was of a green bias so comical that I wondered whether parodists had taken over the studio – but it has actually altered its dire expectations, and quietly made them rather un-dire. Climate-change theory is all “rock solid”, says the government chief scientist, Sir Mark Walport, but in fact the rock has been fracked, and is trembling a little.