Redistributive policy

UK energy crisis due to ‘catastrophic failure of Westminster policy’, warns expert Sean Field

The UK’s energy crisis is the result of a “catastrophic failure of political politics” in Westminster, an expert has warned.

While the recent war in Ukraine has contributed to soaring gas prices, there are warnings that years of botched energy strategies have resulted in bills that could average £7,700 from April, according to the latest. forecasts.

The Conservative government has been accused of inaction on the issue, with ministers failing to appear on television and radio on Friday as it was announced the price cap would rise to £3,549 a year in October.

With households and businesses facing crippling energy costs, it raises the question of how the UK has failed so badly on energy – which is the responsibility of the Department for Business, Energy and the industrial strategy (BEIS) of Westminster.

READ MORE: Protesters gather outside Glasgow Ofgem office to demand energy prices freeze

Dr Sean Field, a researcher at the University of St Andrews Center for Energy Ethics, told the Sunday National: “To put it bluntly, there is corporate responsibility in all of this, but it has been a catastrophic failure of political politics in the UK. for 15 years. »

Energy prices have started to rise around the world due to increased demand after the lifting of Covid restrictions and the resumption of normal life, which has put pressure on supplies.

The Russian invasion of Ukraine has also pushed up prices – although imports from Russia accounted for less than 4% of the UK’s total gas supply in 2021, this has also had an impact on the UK.

But Field said the lack of natural gas storage in the UK was a major problem when prices soared.

“We abandoned what is called the Rough facility in 2017/18 – which divested around 70% of the UK’s natural gas storage,” he said. “So basically we’re almost on a ‘just in time’ system for natural gas from Europe to meet our domestic needs.

He added: “It’s a really bad situation where all of a sudden natural gas prices explode because we’re dependent on that constant short-term supply.

“The ripple effect is that even this morning 67% of all energy in the UK, electricity included, was supplied by natural gas and so when you combine those factors you get a very bad situation for UK residents.

“It’s something that’s been going on for 15 years.”

At the time, Centrica, the owner of Rough, off the Yorkshire coast, said it was uneconomical to repair the aging facility without a grant. It was reported that there were talks with the UK government about reopening it.

Energy researcher Sean Field said the closure of the Rough facility was a ‘corporate decision’ by the UK government which did not take energy needs into account

Field said: ‘The facility needed a bunch of upgrades, they asked the government for help with those upgrades, the UK government said no, and so they said ‘we’re closing it “.

“So it was part of a corporate decision, but also part of a government decision not to support this transformation of the Rough facility.”

Field pointed to other failures including failing to seize the opportunity to create a “more diverse” energy mix in the UK and to reduce dependence on natural gas.

“It’s not going to be a short-term solution – we can’t solve this problem in the next few years, it’s long-term, which we should have done for 15 years, which we haven’t,” he said. he declared. .

“It was also a political failure because we did not have contingency plans in place for a situation like this, where we have a rapid increase in wholesale prices which negatively affects the poorest households and the middle-income households.

“As evidenced by the price cap, we do not have an exceptionally low tariff regime for the lowest income households. We don’t have support for the popular and middle classes.

“And there is no policy to tackle what is really a redistribution of income that is happening in the UK – where all of a sudden the biggest oil and gas companies are making record profits, and during this time, what we see is that ordinary households are getting poorer and poorer.

‘There has been no political thinking in the Westminster government about this kind of situation and now they are scrambling to figure out what they are going to do.

Yesterday Britain’s Environment Secretary George Eustice insisted that people ‘do not have long to wait’ to find out what further steps Boris Johnson’s successor will take to tackle soaring prices.

SPEAKING on BBC Radio 4’s Today programme, he said: ‘We announced a package of measures in June which was a £400 rebate for everyone and then additional support for the most vulnerable.

“Both candidates have said they will do more. You don’t have long to wait, there will be a new prime minister in place in about 10 days.

The National:

There have been many advance warnings of the impending energy crisis. In July this year, the House of Commons Business, Energy and Industrial Strategy Committee released a report on its inquiry into energy pricing and the future of the energy market.

He called on the UK government to ‘immediately update’ its support scheme to help households with rising energy bills and urgently set up a task force to help tackle the problem, saying that should be treated with “the same level of seriousness as the Covid19 pandemic”.

The UK government has two months to respond to the report and said it would be published “in due course”.

Professor Karen Turner, director of the Center for Energy Policy at the University of Strathclyde, said the announced price hikes were “no shock”.

“It’s really disappointing to see an ad come out without there being a plan to tell people that we’re going to do something about it,” she added.

She highlighted the pass-through of costs from a series of supplier defaults in 2021-22 through ongoing customer charges.

It has been estimated that this bill will amount to around £2.7 billion, or around £94 per household.

“It’s very different, for example, from the way bank failures were handled during the financial crisis,” Turner said.

“We didn’t see that on our bank statements,” she added.

Regarding the situation in other countries, Turner said the war in Ukraine has had a widespread impact, but that varies depending on how energy is delivered and how people heat their homes. houses.

READ MORE: Energy charity says people are getting ‘more and more desperate’ as bills soar

“We are exceptionally dependent on gas heating – other countries might not feel as much pain as we do because they are not as heavily dependent on gas, also because of how they get their energy. You have differences in places like France, where we have seen the yellow vests [yellow vest protests] and things like that – people made it clear early on that they were concerned about energy prices, there were different policy approaches there.

“But France is very heavy on nuclear power generation and there is an element of state ownership there and there have been limits on profits and things like that.”

Turner said there needed to be an “urgent state of play” on how to stop rising energy prices in the UK, pointing out that businesses are not covered by the price cap.

She added: “It’s a global problem, but I think in the UK, because of the combination of factors, we’re probably suffering more than most and our inflation is worse – the cost of living in the sense wide is worse.”