If Labour Really Wanted to Ensure People Can Afford to Heat Their Homes it Would Ramp Up the Gas

BEN PILE

According to the Minister for Energy Consumers Miatta Fahnbulleh, “All families deserve the security of a home they can afford to heat.” This statement was included in an update to the Government’s extremely long-winded update to its Warm Homes Plan policy, published on Thursday. The policy is not unexpected, and promises to “help people find ways to save money on energy bills and deliver warmer, cleaner to heat homes [sic]”, adding that “up to 300,000 homes [are] to benefit from upgrades next year”. But there is a problem with Fahnbulleh’s formulation. If the Government is so concerned to give people what they “deserve”, why is it taking so much away from them?

The alleged benefits of this policy are pretty weak beer. For example, the Boiler Upgrade Scheme, the Government claims, will “support more households switch [sic] to a heat pump”. Great. But what are the benefits? Well, according to the same press release, families can save “around £100 a year compared to a gas boiler by using a smart tariff effectively”. For this, the Government will stump up a £7,500 heat pump grant – money taken from other taxpayers – leaving the homeowner with the remaining roughly equal sum. And in case that is not clear, a £100 saving per year on even just a £7,500 outlay is an extremely poor return on investment, even were the other part of the cost actually free magic money. It would take 75 years to ‘pay for itself’, assuming 0% interest, by which time it would have had to be replaced several times. It would never pay for itself at any interest rate above 1.3%.

To give more perspective on that ‘saving’, the energy price cap made necessary by decades of green energy policy failure was increased by £149 this October from £1,568 to £1,717. Today, the price cap for the first quarter of 2025 is to be announced, with analysts predicting another 1% rise, according to the BBC. Moreover, £28 is due to be added to every bill, to help pay for the £3.1 billion of unpaid bills owed to retailers. These rises follow the Government’s removal of Winter Fuel Payment benefit from pensioners, and of course the Government’s election promises to reduce bills. In May, Ed Miliband claimed in a tweet that “only Labour offers a plan for real change to cut energy bills for good”.

Miliband’s opposite, Claire Coutinho, responded to the new report with a complaint that “Labour has quietly introduced a new tax on boiler companies that don’t sell enough heat pumps”. This, explains Coutinho, was the previous Conservative Government’s policy until earlier this year. She cancelled the policy, “because free markets are a better way to make sure cheaper products and better tech improve lives”.

Oh, be still my beating heart! But the Tory conversion to free markets and cheaper products was far too late. And Coutinho’s rejoinder to her successor is hardly profound. The breadth and depth of the Opposition’s, er, opposition is merely an objection to its own policy less than a year ago. As I pointed out in my previous article here, this opposition is phoney. It fails to properly address the fundamentals of climate politics. Hence, while domestic energy prices have tripled over the era of green energy policy, Tory and Labour criticisms of one another have been petty squabbles about £100 more here and empty promises of £300 there. And while industries in competing economies have energy prices a fraction of our own, U.K. Governments make hollow promises of a ‘green industrial revolution’ and making the U.K. a ‘clean energy superpower’. These fantastical statement show that neither party is capable of taking energy seriously.

This brings us back to “warm homes”, which are in fact likely to be colder and poorer this winter and in future winters. The “boiler tax” Coutinho speaks of was a policy that required manufacturers to increase the proportion of heat pumps versus conventional boilers they sold. According to the Telegraph, each boiler sold over this proportion will incur a fine of £500, a levy estimated to add £20 to the cost of conventional boilers. Though Coutinho did ultimately drop the policy, it was her Government that initially intended a £5,000 fine for each excess boiler sold. It would seem, therefore, that Labour has somewhat caught up with the preceding Government’s U-turns, to the extent that it does not want to be seen to attacking the consumer via the manufacturer as was previously the case.

But for all the minimal U-turning, energy prices are still rising. And any good that the Warm Homes Plan is going to do, in terms of making energy more affordable, will only be done by taking money from others to ameliorate the problems caused by such high prices. “This follows our plan to lift over one million households out of fuel poverty,” claims Fahnbulleh, “by consulting on boosting minimum energy efficiency standards for all renters by 2030, delivering warmer homes and cheaper bills”.

In the Labour Government’s imagination, extra costs incurred by landlords will not be passed on to renters. But according to Rightmove’s Rental Price Tracker, asking prices for properties outside London have risen 5.2% over the last year, 2.3% over the last quarter. Rents and energy prices have risen, and no recent Government seems to really understand why.

Leaving aside the debates about the pressure on housing supply caused by record levels of immigration, the easier answer to ‘fuel poverty’ than increasing the price of rent would be to increase the capacity of Britain’s generators. That means, of course, unleashing more of Britain’s natural gas under the sea and land. ‘Fuel poverty’ rates would be slashed far faster and far deeper by policies that returned gas and power prices to the levels seen 20 years ago. Rather than boasting policies that might, maybe, possibly cut £100 off a rising annual energy bill, politicians could boast a £1,000 cut.

But that would require repealing climate legislation, which has become a flagship Labour policy, championed by Ed Miliband and his underlings such as Fahnbulleh. This contradiction is profound. The means to reduce energy prices to this extent manifestly exist – they were the prices that were achieved by the sector before Ed Miliband took office in the 2000s. So the obstacle to Fahnbulleh’s claim that “all families deserve the security of a home they can afford to heat” is plainly her boss’s commitment to the green agenda. It is perhaps too much to expect her to admit it, and to hold him to account for it. But it’s the minimum we would expect from his opposite on the Tory benches. Both parties are engaged in slippery and expensive doublespeak.

Wrap up warm: the Government is here to help you, and the opposition has no intention of stopping it.

This article (If Labour Really Wanted to Ensure People Can Afford to Heat Their Homes it Would Ramp Up the Gas) was created and published by The Daily Sceptic and is republished here under “Fair Use” with attribution to the author Ben Pile