Coffee House

Huhne, the Lib Dems’ black comedian

20 September 2011

Today we got the black comedy follow up to Sarah Teather’s stand-up routine.
 Chris Huhne is going to drive down our energy bills! For those of us wondering how families and businesses can afford his
expensive climate policies, it is a bit of a joke.

The basic issue – as I set out in the new book Let them eat carbon – is that we need to
invest an absolute fortune to meet the range of environmental targets that the government has put in place. Citigroup estimated last September that we need to invest about €229 billion (about
£200 billion) in the energy sector this decade.  That is far more than any other major European economy.  We have a particularly ambitious renewable energy target and are relying on
a particularly expensive and unreliable source to meet it – offshore wind.


Paying for that investment will require energy companies to make more profit and push up electricity prices by 52 per cent – again these are Citigroup’s estimates.  And you
can’t offset all that with improved efficiency.  They think even with an impressive saving in gas demand there would still be a 35 per cent real terms rise in dual fuel bills, even
before we pay for all the insulation work that would require.

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By contrast, if politicians hadn’t decided that we needed to make a rapid transition to renewable energy then we would be in a pretty good position, with a fairly young generation fleet and
well-maintained networks meaning we don’t need to spend too much to keep the lights on.

Switching from one company to another might be a good idea for individual consumers right now.  But it won’t change the fundamentals.  Unless we start junking some of the current
targets, consumers will have to pay a lot more for their energy.

Politicians engage in these farcical attacks on energy companies – at the same time as they implement legislation that will boost those firms’ profits – as a way of ducking
responsibility for the consequences of their policies.  Ministers set themselves up as the consumers’ champion against the excesses of the “big six”.  They even set up
an entire quango – the useless Energywatch, now merged into Consumer Focus – to help spread that message.

The only reason those companies actually do deserve our ire is that they have been lobbying for many of these policies.  For example, EDF put a huge amount of work into securing the carbon
floor price which will hand them a hefty windfall profit while doing nothing for the climate as – in the IPPR’s words – “every ton of carbon that is priced out of the UK will be emitted elsewhere in

The industry has too often epitomised the crony capitalism that is destroying British confidence in free markets.  Their plan seems to be that if they deliver the investment needed they will
get political cover for rising profits, so long as they hug the politicians close.

That strategy is proving a dismal failure, and the performance of European utility shares has been torrid.  Faced with rising prices and rising profits, politicians will “get
tough” whether that means rhetoric and new powers for Ofgem – as Chris Huhne has proposed – or something stronger like a windfall tax.  Around Europe other governments are
cutting subsidies or imposing special taxes on the sector.

Draconian climate regulations are offering very poor value, as I set out for this site at the end of last week.
 British families and businesses are suffering to little end.  Insisting that we have to act to cut our less than two per cent of global emissions now and switch to much more expensive
sources of energy immediately is pure vanity when the major emitters aren’t going to do the same.  We could make a much more useful contribution by focusing on funding research and

We need to heckle Chris Huhne with the facts until he puts down the microphone and let Sarah Teather or Lembit Opik retake the position of Liberal Democrat comedian-in-chief.  He is no
crusader against high energy bills, and we’ll all pay the price for years if we let him lock in high prices with expensive regulations.

Matthew Sinclair is Director of the Taxpayers’ Alliance.

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Show comments
  • Philip Ashmore

    Solar panels what a great way to spend 10k !!.
    They work during the day generating power for the Fridge and any other items you may want on when you are out at work earning money to pay for all the other little luxuries in life then you come home and it’s dark oh dear no power they don’t work in the dark and you cannot store the energy they have created during the day.
    But do not worry because they are topping up your bank account with money from all your friends and neighbours who are in fuel poverty. Think I will get a wind turbine I hear they are good for your bank as well.

  • Fedz

    The government should throw a few £ billion at Mass electricity generating solar panel installations for homes all over the country, costly at first, but surely cheaper for us all in the long run.

  • Baron

    We’ve got rid of the ‘no boom, no bust’ nutter, we’ve got the switcher instead. What has the country done to suffer so badly?

    Superb, Frank P, truly magnificent, and so true.

  • Denis

    It might be interesting to note that, in France, on a standard tariff, I pay 7.56p peak and 4.68p off-peak for my electricity. The rates have hardly changed since I retired here 10 years ago. Moral somewhere??

  • Alan Douglas

    One thing I can say in Huhne’s favour – the high regard he holds himself in – a dirty job, but somebody had to do it !

    Alan Douglas

  • Publius

    Perhaps Frank P can be invited to write “Another View” piece.

    What do you say, Frank?

  • Occasional Ostrich

    Aren’t comedians supposed to be funny?

    Oh, sorry, you’re being ironic (you are, aren’t you?).

  • Verity

    Frank P – Tee hee.

  • Mark, Edinburgh

    Further to my post 4.38pm I now see RWE have broken the pack a little – seems they blame government “taxes”

    I say, steady on Frank P.,that’s no way to talk about a former member of the International Marxist Group and EUsceptic (until he got a job on the Economist)

  • pharbitis

    Frank P: I often disagree with your views and your trenchant way of expressing youself.
    On your analysis of Huhn on this occasion I must ask why you held back….

  • Frank P

    A lot of talk of switching from the fat-arsed, pompous lying little prick. He seems to be high on switching: switching his wife’s name on to speeding ticket (according to her); then indeed switching his wife for a dyke; then telling us that we should switch energy suppliers because we’re all stupid. Bit of switch hitter is this limp, who usurped his government position via the back passage of Downing Street.

  • Mark, Edinburgh

    Bellevue, your question 2.47pm

    Methinks the answer is that the energy companies are handsomely rewarded through subsidy for supporting the green agenda. Also 4 out of the 6 have mainland EU parentage where a similar green subsidy regime prevails.

    One of the quid pro quos of this largesse is to hold your tongue while Ministers play mistruths to the gallery.

    This really is an EU lobbyist problem coming from the 20% renewables target. As we all know one of the major problems of the EU is that once a policy has been put in place it is virtually impossible to change, however mistaken.

    Whatever your view on CO2 being a serious problem or not, it is clear there are much quicker and cheaper ways to get our Co2 emissions down than wind turbines.

    Peter Lilley frequently points out this simple fact. Methinks he’d make a good energy minister in a decent government.

  • Mark Austin

    I have always felt that wind power has been promoted as the UK’s main green electricity sources as it is the one least threatening to industry, in particular nuclear, as the “reserve energy” card can always be played.

    The two alternatives that would yield much better results are firstly wave/tidal power, for which the UK is one of the best placed countries in Europe to exploit.

    Secondly, higher insulation standards. Some years ago, during London Open House, I went round an eco-house. Just to quote one comment by the builder, he had converted the loft to an extra bedrom, and in the 2-3 years after the conversion, the heating in that room had never gone on. Although this level of insulation is currently expensive, if done at first build or conversion, and made mandatory, the costs would come down, and, in any case, be a one-off paid back by lower fuel bills over the years.

  • merlindragon

    Could it be that the Government is so radically pushing this green energy so as to remove reliance on pipes from Russia?

  • tb

    Chris Huhne must be modelling himself on Gordon Brown, drive prices up through his schemes then look for somebody else to blame.

    Typical ‘ladder up’ millionaire politician.

  • Bellevue

    Matthew, what I dont understand is why the energy companies dont tell it like it is – that it is EU ‘green’ policies that are pushing the prices sky high? You have somewhat answered my question in this piece, but Huhne and co continue to blame the energy companies – knowing all the time that he is lying. Why do they allow him to do that?
    I have read your book and it was a real eye-opener. I have bought a second copy to share with friends and family. Thank you so much for your good work.

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