Seeing Tom Hunt, Conservative MP for Ipswich, emerge as a climate change sceptic would not come as a huge surprise to those familiar with his work.
In his latest column for the Ipswich Star, he rightly raises the cost of living as one of the biggest issues of 2022. However, his detail-light analysis seems to conclude that the prioritisation of tackling climate change is the root cause of rising energy bills, and not the substantial spike in gas prices.
At the risk of being accused of being in the ‘North London bubble’, I have some thoughts below as to why tackling climate change and pursuing economic prosperity are not at odds with each other, but intrinsic.
A cost of living crisis caused by gas, not by ‘green’ levies
It is first worth pointing out that, on the cost of living crisis, Hunt omits to mention the Conservative’s National Insurance hike and their Universal Credit cut, and puts forward no solutions other than Labour’s proposal to cut VAT on energy bills and to talk about ‘green issues’ less.
There are of course many other factors putting pressure on the cost of living, but energy prices and climate change is my main focus here.
Moving ‘green’ levies on bills into general taxation would be a reasonable proposal, but this comes with a caveat – if the Treasury looks to cut corners or scrap the equivalent investment entirely, it will almost certainly lead to higher bills as energy efficiency upgrades slow.
Volatile gas prices
However, while suspending VAT and moving ‘green’ levies into general taxation may bring some respite, it does not get away from the central problem of volatile gas prices (which saw a rise of 28.1 percent last year), a point Hunt must be oblivious to if he’s calling for a reduced focus on the energy transition.
In fact, the wholesale price of gas surged by 250 percent, but consumers were ‘protected’ by the price cap. Yet this price cap will be revised in February and could cause bills to rise by a minimum of 50 percent. Cornwall Insight estimates that this will result in an average bill of £1,865 per annum by the summer, with the current forecast for winter 2022/23 exceeding £2,000.
What can the Government do to tackle rising energy bills?
The Government could do two things immediately. Firstly, schemes like the Warm Homes Discount are inadequate for what is facing us. They need to be expanded, ensuring that the eligibility criteria is widened and that the value of support payments is increased.
Secondly, the Government is going to have to provide a substantial loan to energy firms to mitigate the market price spike, with a pot of £20 billion mooted. This should prevent more providers from going under and should mean that consumers are not saddled with further costs. If the Government refuses to intervene, then the reverse may very well happen.
Of course, none of this comes cheap, but a windfall tax on North Sea oil and gas companies could go some way to recouping some of the outlay. Dale Vince, founder of Ecotricity, said that those producers have made £20 billion from burgeoning prices.
You have also got to consider the immense economic and social domino effect of the Government continuing to sit on the sidelines. Large inflationary pressures will put widespread strain on the economy, and millions of households face a perfect storm of rapidly rising costs and stagnant wages which will see many more fall below the breadline.
In the longer term it would be an absolute disaster to curtail the energy transition, as Hunt seems to suggest, and continue our overreliance on fossil fuels which has largely got us in this mess. It is not just an environmental imperative to move to Net Zero, but an economic one too.
Insulate people from volatile fossil fuel prices
There are obviously a range of policies the Government needs to pursue to get to Net Zero, but the quicker we help people transition to renewable energy and clean technology in their own homes, the better they will be insulated against volatile fossil fuel spikes.
For example, if the Government removes VAT on domestic renewable energy and clean technology systems, it will improve the affordability and uptake, as well as providing added benefits to local businesses, jobs and investment.
Some renewables and clean technologies would still be out of reach for some people, so it is important that the Government looks to help everyone transition. The Green Homes Grant was a bit of a disaster and was canned ahead of schedule, but poor Government delivery then should not prevent similar schemes happening now.
The rental market must not be left behind either. A mix of incentives and directives for landlords and local authorities should be used to rapidly bring properties up to a minimum EPC rating of C by the end of the year.
An economic, as well as an environmental, imperative
You would think that providing investment and stimulus that provides jobs and growth, eases the cost of living crisis and tackles climate change would be at the heart of the Conservative’s ‘levelling up’ agenda. A combination of economic, social and environmental benefits.
The renewable sector will add tens of thousands of jobs and billions in investment over the coming years. Suffolk can be a big growth area with Ipswich benefiting. Peter Aldous, Hunt’s colleague in Waveney – which takes in Lowestoft – has grasped this. Why can’t Hunt?
There are huge financial costs that come from inaction, not just internationally, but here in the UK too, through eroding coastlines, flooding, air pollution. If Hunt is not persuaded by the environmental, health and social arguments, he should be convinced by the economic ones.
An investment rather than a cost
You will see more guff like this from people like Hunt over the coming months. It is much easier to blame the ‘green’ bogeyman, rather than putting the work in to address the fundamental flaws to the economy, many of them a result of Conservative policies for more than a decade.
Politicians who operate with foresight, who are ambitious for their constituents and their country, understand the benefits of the energy transition, and are aware of the impact of falling short.
Action on climate is not an economic cost, but an investment and an opportunity.