Cameron's pledge to trim green levies will end up disappointing both supporters and opponents of the government's climate policy
David Cameron caused a furore at Prime Minister's Questions today by declaring that "we need to roll back some of the green regulations and charges".
Leaving aside the wisdom of such a spectacular U-turn from a Prime Minister who once declared people should "vote blue, go green", the key question is whether such a move will work, both politically and economically. On both fronts the answer is a categorical no.
As I've argued previously, axing green levies will do little to help those struggling with high energy bills, because those self-same green levies are used to fund schemes that curb energy use and reduce our reliance on volatile fossil fuel imports. Cutting green schemes will provide a vanishingly small short term reduction in bills, while actively undermining efforts to address the structural issues that are leading to higher energy bills. Cutting a green scheme in the UK will do nothing to address soaring global demand for energy in China and India, it will only make us even more reliant on fossil fuel imports.
But just as importantly, Cameron's cynical green levies gambit won't work politically either, and not just because polls show a majority of people are in favour of green policies.
The fact is that the Lib Dem's will not countenance a major overhaul of "green levies" as long as they are in the coalition (apparently the faces of Nick Clegg and Ed Davey at PMQs were a picture in barely concealed frustration). This means the likeliest result Cameron can expect from his much-trumpeted review of "green levies" is a cosmetic change to one or two green schemes or the axing of the carbon floor price, which has few friends outside the Treasury, all of which would do no more than shave a couple of quid off annual bills.
So Cameron is boxing himself into a very tight corner from which he is likely to anger both those in favour of green policies and those opposed to them. Any move to cut "green levies" will lead to howls of outrage from environmentalists who will accuse him of hypocritically shooting dead his formerly beloved husky. Meanwhile, those calling for the end to all green levies and an end to this climate change nonsense, will declare victory for about 30 seconds before realising that the result of any "green levy" changes is a decrease in average energy bills equivalent to the cost of a cup of coffee.
Of course, there is some nuance to Cameron's assertions that we both need some green levies and need to roll back some others. The reality is that some of the government's renewables and energy efficiency schemes could be improved. But this nuance is likely to be lost amid the angry realisation that any improvements will not miraculously deliver deep cuts in energy bills.
"Ah, but what about the election," Tory opponents of the green agenda will cry. "Once we are rid of these tree-hugging Lib Dems we can go to the country promising an end to all 'green levies'." Well, they could I suppose, but even if you ignore the fact that polling shows a large chunk of the public are in favour of green policies, how do you explain Cameron starting the week by hailing a nuclear deal that will enshrine a clean energy levy on energy bills for 35 years?
The simple fact is that with or without green levies, energy bills will, barring a miracle, remain high and volatile for years to come because of structural market issues. Moreover, the UK's energy infrastructure needs upgrading and this comes at a cost that someone has to pick up, whether it is the energy bill payer or the taxpayer is largely irrelevant. You can argue over whether this upgrade should focus on wind farms, nuclear reactors or shale gas, but significant investment will be required regardless. Even if you were to cave to the scientifically illiterate climate sceptic lobby and ditch all commitments to clean energy - which you can't credibly do because try as the right wing media might you can't wish away climate change - there would be considerable upward pressure on bills. Cameron knows these hard truths, which is why he is floundering so badly with his attempts to suggest the government can miraculously reduce energy bills.
The only answer lies in a much more ambitious effort to improve our nation's energy efficiency. The failure of our political class to make this case credibly and at length is little short of a national disgrace.
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