THE Government’s claims that energy bills will fall in April by 7 per cent, following publication of the latest energy price cap, are disingenuous to say the least.
For a typical house, the new energy cap is £117 pa lower than previously. However, this saving has been achieved only by the sleight of hand of removing £130 of ‘policy costs’, mainly renewable subsidies, from bills and putting them on to general taxation instead.
It’s not a case of robbing Peter to pay Paul, it’s robbing Paul to pay Paul! You are not going to be better off: you will pay more tax instead.
Without that shuffling of money around, energy bills would have risen yet again.
For years, of course, we have been fed the lie that it is the high cost of gas that is making our electricity prices are so high. The BBC, reporting on the cap, are still attempting to gaslight, claiming: ‘However, prices are still about a third higher than before the war in Ukraine.’
The disinformation is breathtaking and blatant. They want people to believe that the two things are connected – the war and its effect on gas markets on one hand, and high energy prices on the other. The clear intention is to portray the Ukraine war as still keeping gas prices elevated.
In fact, the new price cap contains another drop in the price of gas, amounting to £44 annually. Electricity prices, however, have increased by £58 before the £130 taxpayer subsidy is built in. Clearly the two things are unconnected.
Long-term gas price trends confirm that the BBC’s claim is misleading. Firstly, energy prices were extremely low in 2020/21 because the pandemic lockdowns reduced demand. But if we go back to the first Ofgem price cap, January to March 2019, we see that gas prices have barely risen since in real terms:
Although domestic gas bills have increased from £523 a year to £766 under the new cap for April, nearly all of this is explained by general inflation. However, electricity prices are 65.4 per cent higher despite RPI rising by only 43.7 per cent.
Clearly gas prices cannot be the reason why electricity prices have far outstripped general inflation.
Electricity prices are high for one reason, and one reason only – Net Zero policies.
As already noted, the new cap understates the impact of Net Zero. The new cap takes £130 of renewable subsidies off electricity bills and shifts the cost on to taxation, or more accurately government borrowing to be paid back by future generations.
Without this shuffling money around, electricity bills would now be £1,005, or 90 per cent higher than in 2019.
Editor’s note. On top of this, without the energy security that could have been granted by North Sea gas and oil, the British consumer now has to look forward to energy suppliers pulling a raft of fixed-price tariffs from the market following the spike in oil and gas prices caused by the US-Israel war with Iran
