Miliband’s energy policy isn’t just incoherent, it’s a danger to security

Ed Miliband at COP29
Ed Miliband at COP29

There is something grimly funny about Ed Miliband flying back and forth, with an entourage of 470 delegates, to the climate change conference in Baku, Azerbaijan, a country which relies on fossil fuels for 90 per cent of its exports. The Energy Secretary is, after all, the man who once instructed the country to buy EVs, while admitting live on television that he had not done so himself.

But Miliband’s hypocrisy is no laughing matter because his policies bring serious dangers to Britain. He aims to reach net zero by 2050 – meaning Britain’s total greenhouse gas emissions can never be greater than the emissions we remove from the atmosphere – and to decarbonise the grid by 2030. At Baku last week, he set a third ambition: to reduce carbon emissions by 81 per cent, based on 1990 levels, by 2035.

An intelligent man, Miliband must know that what he says about these objectives, and the policies he pursues to achieve them, is dishonest. He claims the energy technologies he favours will reduce consumer bills. He insists “decarbonisation does not mean deindustrialisation”. And he says renewable energy will make us less dependent on foreign dictators and autocratic governments.

Before the election, Miliband claimed that his policies would cut household energy bills by £300 per year by 2030. But since then he has avoided repeating the promise, and it is clear why. The Office for Budget Responsibility says the country will pay more than £14 billion in environmental levies by 2029 to subsidise the renewable technologies backed by the Government, an increase of £3.4 billion from its last estimate in March. The Institute for Fiscal Studies has calculated that environmental levies will rise to £120 per household per year by 2029.

In fact even the report Miliband and his ministers cite to claim their plans will mean lower bills – by the National Energy System Operator, a publicly owned company reporting to Miliband himself – says bills will rise.

NESO modelling says an energy mix with a higher contribution from fossil fuels will be cheaper than the mix demanded by Miliband. And even this calculation depends on assumptions skewed in Miliband’s favour, such as gas prices 40 per cent higher than official estimates, a carbon price double the existing level and a rapid increase in offshore wind construction while implausibly leaving construction costs stable. The report says, “There are also risks that the accelerated pace [of decarbonisation] reduces competitive pressure, increases supply chain tightness or otherwise increases costs.”

Higher costs mean less spending power for households, and less competitive industry. Miliband and his ministers may chant their mantra about decarbonisation not meaning deindustrialisation – and indeed claim it is a spur for reindustrialisation – but repetition does not make a wrong claim right.

Having once had internationally competitive costs, in recent years British industrial energy prices have risen to 50 per cent higher than the average of comparable advanced economies. Our industrial electricity prices are four times higher than in China, three times higher than in America and Canada, more than twice as high as in South Korea and New Zealand, and twice as high as in the European countries, such as Finland, France and Sweden, that strongly back nuclear energy.

Our problem is not, as Miliband claims, exposure to international gas prices. Those prices have increased, but the Government is taxing North Sea oil and gas out of existence and deliberately delaying the deployment of small modular nuclear reactors. It is committed to carbon budgets, invented by Miliband the last time he ran energy policy, which have deliberately forced up prices. It pursues policies that run faster than technology allows, and so subsidises systems with higher costs and lower outputs than we would otherwise enjoy.

And for these worse outcomes, ministers plan to deploy hundreds of billions, or trillions, of pounds in public and private capital. These sums could otherwise be allocated for infrastructure, research and development and business growth that create prosperity.

So Miliband’s policies not only increase costs and damage industry, they also make us less secure. Wishful thinking cannot compensate for the intermittency challenges faced by renewable technologies, which is why a grid dominated by renewables risks shortages, outages and “demand flexibility”, as the NESO report euphemistically calls what most people would consider “rationing”.

The rush also contributes to energy insecurity. Miliband has made clear, for example, that he sees no problem with Chinese companies such as Mingyang Smart Energy building floating turbines for offshore wind farms in the North Sea. But there are serious concerns about Chinese companies retaining control of the technology within turbines after installation, and Norway has recently barred Mingyang from its supply chain.

So much for ending our alleged dependence on foreign dictators. But hurried targets mean ministers want to avoid difficult questions. Chinese products and services made cheaper by massive subsidies and suppressed labour costs make a mockery of promises of industrial strategy, domestic supply chains and green British jobs.

The same is true with the treatment of cheap Chinese-manufactured EVs. While Europe and America plan tariffs, Miliband will prioritise short-term reductions in British emissions over the long-term viability of automotive manufacturing at home. And this is before we consider the use of slave labour in producing solar panels in Xinjiang.

Miliband is in effect claiming to have resolved the energy trilemma – the tension between cost, security and decarbonisation. But if things really were so simple, every country in the world would be marching as quickly as Miliband towards his objectives, and we would already be enjoying the lower costs, energy security and green jobs he promises.

But the trilemma has not been resolved and over the next five years, the British people are going to pay more to get less, and replace a secure energy supply with an intermittent and unreliable alternative. This is not progress. Nor is it a route to prosperity.