The decision by David Cameron’s government to ditch what he denounced as “green crap” policies will cost every household as much as £150 a year by the autumn, new analysis has shown.
With energy prices already soaring and bills set to rise even further this year, it suggests Cameron’s decisions to effectively end onshore wind projects in England, cut solar subsidies and slash energy-efficiency schemes played a large part in rising bills. It comes with the government preparing to announce its much anticipated energy strategy this week, as Russia’s invasion of Ukraine further drives up energy prices. It is expected to push measures such as solar and onshore wind power generation, as well as North Sea oil projects. However, there are concerns that the Treasury is holding back more radical action.
Many of this week’s measures could reverse action taken by the coalition government. Analysis by Carbon Brief looked at the cumulative effect of ending onshore wind subsidies, cutting energy efficiency funding and scrapping a programme to make all new homes carbon neutral. It also factored in cuts to solar energy subsidies.
With the energy price cap already at £1,277 a year and rising to £1,971 in less than a fortnight and an expected £3,000 in October, the analysis found that maintaining the green policies would have reduced energy costs by £8.3bn a year for the economy overall, part of which would equate to £150 a year per household.
Ed Miliband, the shadow climate change secretary, said: “The government said they were ‘cutting the green crap’ but it was a disaster - with bills for working families much higher as a result. This demonstrates once again that going green is the right way to have energy security, cut bills, and tackle the climate crisis.
“However often this government tries to relaunch their failed energy policy, they cannot be the solution to the crisis they created because they continue to face both ways on crucial issues like fracking and refuse to invest at scale at the solutions we need, including energy efficiency.”
Dr Simon Evans of Carbon Brief, who conducted the analysis, said: “Cutting the so-called ‘green crap’ has left UK households highly exposed to soaring global gas prices and Russia’s invasion of Ukraine. Energy efficiency and cheap renewables are the fastest and most effective ways to cut gas imports – and household bills.”
Cameron won the Tory leadership by forging an eco-friendly reputation, pictured with huskies on an early trip to the Arctic in 2006 and later installing a wind turbine on his house but reports emerged that he had told aides to “get rid of the green crap” in 2013. At the time that the remarks emerged, Cameron’s team said they did not recognise the phrase, but did not offer an outright denial. Then, a series of policies designed to push energy efficiency and renewable energy was scaled back.
The number of homes having their lofts or cavity walls insulated each year dropped by 92% and 74% in 2013 respectively and has never recovered. Subsidies ended for onshore wind turbines, and planning reforms made them harder to build. Meanwhile, solar power was excluded from government support in 2015.
Ministers have been battling for weeks to find ways of taking the pressure off energy and fuel costs. Boris Johnson travelled to Saudi Arabia this week to call for cheaper oil prices, while ministers have made clear that onshore wind and solar power generation will be prioritised in their plans. However, chancellor Rishi Sunak has rejected more radical plans such as cutting VAT on fuel bills or delaying a planned national insurance increase to help with household costs.
Government officials said that a package worth billions had already been designed, including a £150 council tax rebate for many households in England from April and a £200 energy bill loan in Great Britain in October. A Department for Business, Energy and Industrial Strategy spokesperson said: “We have consistently backed renewable energy sources including both onshore and offshore wind, delivering a 500% increase in the amount of renewable energy capacity connected to the grid since 2010.
“We are also accelerating our progress in upgrading the energy efficiency of England’s homes, investing over £6.6bn to decarbonise homes and buildings and bringing in higher minimum performance standards to ensure all homes meet EPC Band C by 2035. We are also insulating millions of consumers from high gas prices through the energy price cap.”