IEA - Energy price freeze is middle class welfare on steroids

From: Think Tanks
Published: Mon Sep 12 2022

Andy Mayer, Chief Operating Officer and Energy Analyst at free market think tank the Institute of Economic Affairs comments on the government's energy price freeze plans

The energy price freeze is middle class welfare on steroids. It represents a gigantic, untargeted handout to households funded by an increase in debt. It will mean future taxpayers subsidising hot tubs, heating swimming pools, and cooling wine cellars.

Price controls don't work. The freeze will encourage more energy use, risking blackouts, and discouraging investment in energy saving.

It would be better to use targeted welfare and tax cuts to help those who need it.

On fracking and planning:

The end of the moratorium on fracking could not come soon enough. This is fantastic for British energy security and future bills.

There is a clear need to address the planning system and streamline consents so more can be built faster and cheaper, be it fracking, solar, wind or any other projects, to deliver more domestic supply.

On reforming the electricity market:

The electricity market is broken. The suspension of green levies is a welcome start. The new contracts for difference could help ensure that the high cost of gas is not setting the price for the entire market. But it will ultimately depend on the agreed prices. The government needs to drive a very hard bargain to avoid another Hinkley Point.

Company: Think Tanks

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