Liam Halligan: Should green subsidies be scrapped to cut household bills?

Liam Halligan
Liam Halligan
GB News
Liam Halligan

By Liam Halligan


Published: 07/02/2022

- 13:39

Last week, after regulator Ofgem raised the energy price cap 54%

When On The Money launched back in September, we warned that the UK faced “a winter of discontent”.

Britain is a “at a turning point not dissimilar to the late 1970s”, said On The Money five months ago, heading for high inflation, a cost-of-living crisis and industrial unrest.


The Cost of Living is once again soaring, convulsing politics – just as it did 40-odd years ago. While the Consumer Price Index suggests prices are 5.4pc up on last year, the broader Retail Price Index shows inflation at 7.5pc – and, for millions of less well-off households, spending a higher share of their income on food and fuel, inflation is surely well into double digits.

The Cost of Living is once again soaring, convulsing politics – just as it did 40-odd years ago. While the Consumer Price Index suggests prices are 5.4pc up on last year, the broader Retail Price Index shows inflation at 7.5pc – and, for millions of less well-off households, spending a higher share of their income on food and fuel, inflation is surely well into double digits.

Last week, after regulator Ofgem raised the energy price cap 54%, Rishi Sunak unveiled a support package. The Chancellor scheme involves a council tax rebate and complex loan scheme to help households cope with average annual fuel bills of almost £2,000.

Now Sunak is warning prices will rise even more in the autumn – as wholesale gas prices remain elevated. Calls for a fundamental rethink of how we generate, obtain, store and charge for energy are getting louder.

10pc of this latest rise in the energy price cap, and in our household bills, goes towards the cost of energy companies going bust, says Ofgem. That's pretty astonishing.

And between 15 and 25pc of our energy bills is channelled towards subsidies for firms and landowners involved in providing renewable energy – including onshore and offshore wind farms. Again, that doesn't sound right.

Yes we need gradually to wean ourselves off fossil fuels like oil and gas. But the UK’s determination to do that faster than almost any other major economy means households are now paying more for fuel than they should be.

Why should the costs of transitioning to renewables be added to fuel bills – given that poor and struggling families, especially now, spend a much higher share of their money on fuel.

And that's our On the Money question today:

Should we scrap green subsidies to cut household bills?

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