Have you paid £2 a litre for diesel yet? I hope not but events in the Middle East are creating pressures on the prices people are paying at the pump, increasing the costs of fertiliser that is vital for food security, as well as feeding through to other prices. So it is not a surprise that energy bills – heating oil, central heating, or the cost of filling up the car or van – are the biggest issues being raised with me at the moment.
Ongoing disruption to international shipping is playing a significant part in the higher costs affecting supply chains. However, there are elements of the prices we are paying that government does control and lowering them could make a real difference to families and businesses. For example, over 50 per cent of the cost of filling up at the pump is tax. VAT is levied on energy bills at 5 per cent. There are also many other levies and charges added to those bills.
Further costs are being added due to the government’s arbitrary rush to decarbonise the grid by 2030 – yet we already have some of the highest electricity prices globally.
And it is worth remembering the pledge Labour made before the last election to households across the country to cut bills by £300. However, they are higher now than at the time of the election and forecast to increase further from July if the Iran situation is ongoing then.
But it does not have to be like this. Under the Conservative Party’s Cheap Power Plan we would remove the levies, abolish VAT on energy bills for 3 years, scrap the carbon taxes - taken together this would reduce household bills by £200. This is a plan that could be put into action now bringing much needed relief – and we would achieve that by reducing taxes and charges, rather than borrowing billions to provide subsidies to mitigate all these Government imposed costs.
On fuel, the Chancellor committed in her Budget to increase fuel duty by 5p a litre beginning from September. That was the wrong choice after 14 years of frozen rates by the last Conservative government. She should drop this hike that would add to ever growing costs for families and businesses.
When MPs had the chance to vote for our plan to cut bills by £200 and drop the 5p rise, Labour MPs voted against. Liberal Democrats sat on their hands. Reform MPs didn’t even show up to vote to help their constituents.
In energy, we need a balanced approach that delivers secure and affordable supply. During my time advising the then Energy Minister a decade ago, we pursued an energy mix. We signed the contract for the first new nuclear power station in a generation – Hinckley Point C – which is coming online soon. We enabled the UK to become a leader in offshore wind off our coast. And incentivised the continued exploration of North Sea oil and gas.
While the government is supporting renewables, it is taking a perverse approach to home-grown oil and gas. Experts estimate there are billions of barrels that could still be produced in the North Sea which would generate billions of pounds of taxes, support tens of thousands of jobs up and down the country, and improve our energy security.
But Keir Starmer and his Net Zero Secretary have so far refused to licence new fields to maximise these resources. Instead, they prefer to import gas from Norway produced from fields in the North Sea, or to import liquified natural gas from Qatar (which has a much higher carbon footprint that home-grown gas). Now we read reports there may be another u-turn coming. If that is the case I hope it materialises soon as that’s what my party has been campaigning strongly for.
Having competitive energy prices is vital for a successful economy and ensuring people can afford to keep their homes warm. That means focusing on the interest of British people and industry so we can get Britain working again.
