Ed, the Red Queen of subsidies
Who needs the laws of thermodynamics when you have wishful thinking and the magic of hidden subsidies?
Sometimes I’ve believed as many as six impossible things before breakfast,” said the Red Queen. Or as our very own Red Ed might put it: who needs the laws of thermodynamics when you have wishful thinking and the magic of hidden subsidies? Here are a few impossible things that our Secretary of State for Energy Security and Net Zero believes, starting with the reality that the cost of fuel in the UK is fast destroying the country’s ability to make anything.
Britain has far and away the dearest industrial electricity prices in the developed world. The EU average is 14p a unit, but thanks to 5p of hidden taxes, a medium-sized UK manufacturer pays 29p, more than three times his US competitor. Since you cannot make anything without energy, this is a long-term death sentence.
Indeed, Ed himself keeps telling us that competitive fuel prices are vital for prosperity. He boasts that going green will take £300 off domestic fuel bills. Actually, he has not said that recently, perhaps because even he is starting to see that believing it is another impossible thing before breakfast. Getting to net zero by 2050 is itself an impossible thing, although he will grant subsidies on an almost unimaginable scale in his efforts to get there.
Ah, yes, subsidies. Did you know there is an official list of them? It has more entries than you can shake a stick at, 1,152 of them. Mind you, it may not be entirely accurate. The indefatigable David Turver at Eigen Values has struggled through the list and discovered something called the UK Film Tax Relief Prolongation. Its subsidy is apparently £2,960bn, which is rather more than the UK GDP. Even Ed would be hard-pressed to disguise that.
As you might guess, the vast bulk of the handouts are for energy. On Mr Turver’s maths, they total £328 billion. Since some chunky programmes are in the list at zero, even that might be an underestimate. The complexity of the support schemes for offshore wind, for example, is designed to make the real cost of the juice they generate almost impossible to calculate. It is clear, though, that they run into billions of pounds.
While Ed’s department is trying to snuff out North Sea oil, he is impoverishing us by pretending that using wind instead of oil is cheap. In the moments when the wind is blowing around Britain (but not too hard) that may indeed be true. But when it doesn’t, keeping the lights on means burning gas. Gridwatch does what it says on the tin, and monitors supply. Recently there have been many days of calm in the North Sea (and further east). At the height of the rush hour on a recent Thursday, there was almost no wind. Gas was providing 64 per cent of the electricity supply, from generators that must spend much of their time on stand-by for days such as those. So, another subsidy.
Perhaps the most egregious offenders are the wood-burning subsidy eaters at Drax. The owners of what was once the UK’s biggest power station is now burning wood pellets imported from North America. This counts as renewable “biomass” for Ed’s calculator on the absurd argument because those forests will eventually regrow. Drax is lining up an extension of its current subsidy regime by going for carbon capture and storage, an unproven technology that looks like pulling yourself up by your own bootstraps.
All this progress-by-subsidy might matter less if any other countries were following the Milliband lead. They are patently not. Both oil production and world wood burning are at record levels, while Chinese cars, built with cheap energy from coal-burning, are destroying the West’s auto industry. We are impoverishing ourselves for no gain in world CO2. Just one more impossible thing before breakfast.
And when you consider that the need to restrict man made emissions of CO2 is, at the very least, questionable and needs to be debated rather than followed as a religion that brooks no challenge, the whole farce is even worse than the article describes.