The UK's mad money-go-round energy policy

By The Rt.Hon. the Lord Redwood

It gives us great pleasure to reproduce the following article by Lord Redwood who exposes the lunacy behind the government’s current UK energy policy which prohibits oil and gas companies drilling in new fields giving us some of the highest prices in the developed world thereby threatening swathes of manufacturing industry which the government then subsidises through random hand-outs.

Given the crisis in the Gulf which has brutally exposed the UK’s dependency on foreign oil and gas, how long can the government sustain its present policy without doing untold damage to domestic households and the wider economy?

Facts4eu have set out in stark terms the rush of factory closures and company collapses brought on by high energy prices, high carbon levies, high National Insurance and Business rates and by net zero bans under this government. We highlighted the closure of 3 leading ceramics companies, two of our six refineries, large petrochemical plants, sections of the steel industry, plastics producers and fibreglass makers. These were all brought down by excessively dear energy and high taxation. Vehicle makers face complete closure of all diesel and petrol car lines before 2030. Oil and gas companies are banned from adding new finds to their half empty pipes and production platforms as the old fields decline.

After the event of all these losses the Chancellor this week threw small sums of possible help to those that remain battling against the UK's uniquely hostile environment for people wanting to use energy to make things. She proposes a £350 m fund for "Critical chemical" businesses, without specifying who and how they might qualify. She offers £120 m for ceramics companies that have staggered on despite the impossibly high costs to fire the kilns.

She offers hauliers 12 months relief from Vehicle duty whilst coining in ever larger sums on fuel duty and VAT every time rubber hits the road.

It is mad policy that taxes industry too much then offers them a small proportion of the extra tax back as grants to a lucky or favoured few. Meanwhile they nationalise steel and pump billions in as subsidies to keep open blast furnaces their net zero policies say have to close.

When will they tell the workers and let them down?

There is an irony in the government's position. It says growth will require accepting more taxes, laws and control from the EU, yet these latest policies of giving subsidies and cutting some tariffs require Brexit freedoms to be able to do them at all. Joining the EU carbon trading and tax system would mean even higher carbon taxes and even more businesses going under as a result.

The government has designed a mad money go round. Tax business too much, relent, give them some back as subsidy, then tax them some more to try to balance the books. At a time of world oil and gas shortage thanks to the Gulf blockades the UK alone bans new oil and gas at home and taxes any energy company that comes too close. These latest measures are to be paid for by, yes you guessed it, yet another tax on oil and gas companies! The money go round taxes UK companies into closure and foreign companies into leaving or not coming to the UK in the first place.

The Gulf war has added to the strains this bad policy creates. It has resulted in the UK government as a "temporary measure" allowing the purchase of jet fuel and diesel from foreign refineries that use Russian oil whilst our own oil has to stay in the ground! For industry to flourish you need plenty of cheap energy. The US knows this, does it and goes from strength to strength. The UK government does not know it, does the opposite, and watches helplessly as refineries, ceramics factories and the rest close down. The UK government needs an early re opening of the Gulf routes and a return of more Middle East oil and gas, because its whole strategy requires us to rely on imports and shut down our industry as quickly as possible.

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