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UK energy U-turn cost £3.14bn

A report from the parliamentary energy and climate change committee claims that the dramatic shift in UK energy policy since the Tories were elected last year has cost UK energy consumers an additional £3.14bn in interest payments on investment.

According to committee chair Angus MacNeil MP:

“Billions of pounds of investment is needed in order to replace ageing energy infrastructure, maintain secure energy supplies and meet our legally binding climate change targets [but] since coming to office in May, the government has made a number of sudden and unexpected changes to policy. This has spooked investors and left them wondering ‘what will be next?’”

This is now coming back to haunt the government as investment funds seek additional interest on investments in UK energy as an additional hedge – in the absence of a long-term energy plan –against the risk that ministers will make similar dramatic shifts in policy without appropriate consultation in future.

While the policy U-turns are thought to have added an additional average of £120 to customers’ bills, of greater concern is the potential impact on what remains of Britain’s manufacturing base.  Major employers such as Tata Steel have already closed plants and laid off workers, citing high energy costs as a major cause.  With much of the cost of Britain’s transition away from its dependence on coal already landing on the shoulders of business, there is a desperate need for a long-term energy plan.  The last thing anyone needs is more costly knee-jerk policy changes.

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Let us not forget that beyond hard-pressed bill-payers are thousands more who can no longer afford electricity at all