The Energy Prices Bill being rushed through Parliament has the good intention of reducing energy bills for consumers but could create a big bias against renewables and in favour of oil/gas. It is effectively a windfall tax of up to 100 per cent on the more established renewable electricity generators. This contrasts with the 25 per cent windfall tax on gas/oil profits. There is also no guarantee that the Minister will give these renewable energy producers a tax break if they invest in more UK renewables. So we could end up in the ridiculous situation where energy producers get a huge tax reduction if they invest to pollute the planet, but clean energy doesn’t.
It is still unclear whether nuclear power stations or biomass firms, such as Drax, will have a cap on their profits. So it might just be wind farms, hydro and solar that are paying to reduce bills. It goes to show what Greens have been saying for decades, that what is good for the environment is good for our economy. The subsidy will join the existing Contracts for Difference schemes that have already been reducing energy bills in recent months. Renewables are cheaper, cleaner energy than either nuclear or fossil fuels and it’s time the government celebrated that fact.
Unfortunately, we have a government in the pockets of the fossil fuel industry, so there is an obvious suspicion about a bill that gives a Minister powers to make decisions without parliamentary scrutiny. For example, people that benefit from cooperatively owned wind farms may be hit by the Minister’s regulations and other communities discouraged from owning their own clean energy in future.
There is a six-month sunset clause on most of these powers, which means they have to come back to MPs to be renewed, but some powers are indefinite and others are retrospective (being backdated to January). However, major powers like a Minister’s ability to ‘acquire energy infrastructure’ last for three and a half years. This appears to enable an incoming green government to nationalise any UK energy producer we feel is ‘appropriate’ – but we would have to give parliament a 90-minute debate on the regulations.
These, Henry the 8th powers, are increasingly favoured by this government, as it allows a small right-wing oligarchy to act without serious challenge. But the regulations made this way during the Covid crisis were often awful legislation, leading to bad laws being enacted by the police. The Lords have previously managed to delete many of these powers from other bills.
What we need now is a government that will use the tax system to recycle the excess profits of the oil/gas producers back into the hands of consumers with a much higher windfall tax. This would not only reduce the burden on taxpayers, it would cut government borrowing and stop the need for a further round of austerity. Failure to do this creates an uneven playing field that favours investment in oil/gas, rather than renewables and will lead to the same problems of dependency on fossil fuels and higher prices.