Ministers should leave the market aloneby Dieter Helm / September 18, 2014 / Leave a comment
Published in October 2014 issue of Prospect Magazine
This piece is part of our special report on energy policy. To read the second piece in the series, click here. To read the third piece in the series, click here.
When it comes to energy, most politicians say they want lower prices and more investment. The word “and” is altogether more palatable than the word “or.” All sorts of wheezes are deployed to put off the day of reckoning. Labour leader Ed Miliband wants to freeze prices while he makes the market competitive. Prime Minister David Cameron thinks it will be more palatable if taxpayers rather than customers pay for some of the more expensive policy interventions. Chancellor George Osborne thinks that nuclear investment can be paid for with Chinese money. Meanwhile Ed Davey, Secretary of State for Energy and Climate Change, holds out the fantasy that more investment will mean lower prices, because he knows that the price of gas (and oil) is likely to keep going ever upwards, until it makes even offshore wind economic. His certain knowledge of the future is not unique—both his predecessors, Ed Miliband and Chris Huhne, held similar views.