Gordon Brown’s £1 billion household energy package is not only naïve, unprincipled and cosmetic, but marks a failure of the Labour Government after adopting a botched EU climate change policy. His attempt to offer £910 million to pay for all low-income and pensioner families to get free loft and cavity insulation, with six million others offered half-price deals, is a short term fix. Basic economics will prove that those energy companies will now be forced to hit the consumers in the long-term with increased prices. Those are the terms of Brown’s daylight robbery of the Big Six power companies.
This is not merely a national failure – it is a failure of its European Union climate change policy. Brown’s national energy package has been presented as a ‘better alternative’ to a windfall tax. The windfall tax was itself debated by the Labour Party because the Government signed itself up to a European climate change initiative and got its figures completely wrong. The EU Emissions Trading Scheme (ETS), which was designed to tackle climate change through anti-pollution measures, ended up awarding large and substantial funds to energy companies. Labour has already realized the extent of the losses but will do nothing. It is already reported to have cost the UK economy up to £530 million a year. To rob the cash he lost on his bungled EU anti-pollution climate change policy, Brown is now pumping grand sums of money, £1 billion in fact, to prop up consumer energy and home bills.
To cover his mistakes on a massively destructive EU policy, Brown has decided to give away the money to cover himself. It will not rub off on the voters and the Prime Minister has already been rumbled. But it is on Europe, not merely his failed economic recovery plan, where he got the sums wrong.
