Sir Tony Blair's influential think tank has said Chancellor John Healey should use the Budget to shift the focus of Britain's energy strategy from net zero to providing a cheap supply to consumers. The Tony Blair Institute for Global Change (TBI) also said the Government should use its 10-year plan to set out reforms aimed at making energy cheaper in the UK.
Energy prices among highest in Europe
Energy prices in Britain are among the highest in Europe and the G7 group of countries because of significant dependence on natural gas, which often sets the overall cost of electricity. Gas prices have risen because of the wars in Iran and Ukraine, which has had a knock-on effect on energy prices.
In a report released on the eve of the Budget, the think tank said the Government should replace its Clean Power 2030 strategy, which aims to decarbonise the grid, with a new "cheaper power mission". The main aim of this is to bring down the price of energy.
Proposals for the Budget and 10-year plan
The TBI suggested that the Budget could be the start of this by introducing a programme which rewards businesses that use electricity at off-peak times, and in areas which do not place huge demand on the power system. Prime Minister Andy Burnham should use his 10-year plan later this year to speed up the connection of the most valuable energy projects to the grid, the think tank added.
The think tank said Mr Burnham should also reopen the case for zonal pricing. The idea was rejected by former prime minister Sir Keir Starmer amid fears it could increase the price of electricity in the south east of England, even though it would reduce bills in areas like Scotland where a lot of energy is generated.
Think tank director calls for strategy change
Tone Langengen, director of climate and energy policy at the TBI, said: "Britain is paying wind farms to reduce their output at the same time as businesses are struggling to get the electricity they need. That is a clear sign that our energy strategy needs to change.
"Clean energy remains Britain's future, but the test should be whether we can turn it into cheaper, reliable power that households and businesses can access.
"The Government should replace Clean Power 2030 with a cheaper power mission – keeping net zero as the destination, while putting affordability, security and electrification at the heart of how we get there.
"The Budget can start now by rewarding businesses that use wind power the grid would otherwise be unable to use.
"The ten-year plan must then tackle the deeper problems in our grids, markets and energy system so Britain can turn its energy resources into a competitive advantage."
The TBI's latest research reflects the sentiments of its founder, former prime minister Sir Tony, who earlier this year made a similar criticism in an essay critical of Sir Keir Starmer's government. In that 5,600-word article, Sir Tony urged the then-government to "remove those parts of the net-zero agenda which prioritise clean energy over cheaper energy".
Mr Burnham appears to have somewhat answered the call by his Labour predecessor Sir Tony by approving drilling at the Jackdaw gas field in the North Sea.
