As SSE raises its energy prices by 9 per cent, is the firm right to blame UK green policies?

Matthew Sinclair

So long as the government sticks to radical EU targets for the energy sector – particularly for a drastic increase in the use of renewable energy – domestic and industrial consumers will continue to face punishing increases in prices. Attempts to reassure investors with expensive commitments like the carbon price floor will ultimately backfire, as they know there are risks to the policies on which they are relying. The fiscal adjustment and poor economic growth are already putting pressure on living standards. There are limits to what families, and the politicians who need their votes, will stomach. With other countries not imposing anything like the same burdens on their industries, and the UK responsible for well under two per cent of global emissions, there is little to show for the sacrifice. This country urgently needs a more affordable climate policy.

Matthew Sinclair is chief executive of the TaxPayers’ Alliance.

Jim Woods

SSE’s announcement has raised questions of whether the transition to clean energy is too expensive. It feels like a question of “how good can we afford to be?”. But are the underlying assumptions valid? A recent Green Monday business survey showed major energy users expect the price they pay for energy to increase by 6 per cent over the next two years, which they expect to be higher than competitor economies. But when asked about the influence of underlying factors, 77 per cent attributed it to fossil fuel prices, versus 23 per cent and 24 per cent for carbon policies and transmission costs. In an era of rising commodity prices, business’s prime concern is the UK’s exposure to imported fossil fuel prices, exacerbated by an energy crunch arising from the uncertainty over the government’s desired generating capacity. In short, that points to too little policy rather than too much.

Jim Woods is a director at Green Monday.