Dale Vince: Three-Point Plan to Halve UK Energy Bills

Labour has been urged by green entrepreneur Dale Vince to reform Britain’s energy market to protect the nation from soaring energy prices and the broader economic impact those have.

His three-point plan, which could halve Britain’s energy bills, is published today in a bid to highlight the extent to which our energy market is urgently in need of reform – for the benefit of consumers, businesses and the wider economy.

Green industrialist Mr Vince has long argued that the cost of energy could be reduced by ‘breaking the link’ between the global price of gas and the price we pay for our home grown green energy sources, the wind and sun.

Mr Vince has published several reports into the economic impact of this ‘link’ and today introduces a new perspective – the wider economic impact of our out of control energy bills.

Inflation

Independent analysis by the respected National Institute of Economic and Social Research shows that if we had broken the link at the height of the energy crisis, the saving on our energy bills would have had a profound macro economic impact, driving down inflation and Bank of England lending rates, reducing mortgages and the overall cost of living – putting hundreds of pounds into the pockets of every Briton – while adding a massive £30 billion to our economy.

Mr Vince said:

“In 2023 the link added £43 billion to our energy bills which has a knock-on impact in our economy. It increases the retail price index which is a major influence on Bank of England lending rates, which knocks on to mortgage rates, pay bargaining and our general cost of living.”

The campaigner is calling for an urgent review of his three-point plan, the second element of which is ‘putting an arm around the North Sea’ by using a green energy mechanism to guarantee oil and gas prices, protect jobs and investment already made, while the third is controlling the profit margins of the mostly foreign owned Network Operators, who make billions managing privatised monopoly grids.

Mr Vince has calculated the five-year average saving to the nation of all three measures to be £20 billion per year.

Mr Vince also proposes a ‘progressive tariff’ for energy that would exempt low consuming households from the stealth taxes that have accumulated on our energy bills, adding modestly to energy prices when spread across the higher levels of consumption while being neutral to the Treasury.

And the removal of VAT from our energy bills, which are a necessity – applying that 5% instead to flying.

“VAT on energy is a regressive form of tax,” says Mr Vince. “Millions of people struggle to pay their energy bills and face the choice of heating or eating, especially in the winter. Meanwhile flying, which is a luxury, is VAT free. How does that make sense?”

Mr Vince, who set up the world’s first green energy company 30 years ago, has presented his strategy to bring bills down and grow the economy to the Government and is now distributing his findings – in the form of this newspaper – to every MP and Peer in the land.

So far, the only political leader to support Mr Vince’s ‘breaking the link’ proposition is the Liberal Democrat leader Sir Ed Davey. He said:

“Until we break this link, we will not see our bills come down due to ever-increasing amounts of green energy on the grid – the global price of gas will prevent that.”

Green leader Zack Polanski – who has said in the past “our energy bills soar because successive governments have shackled us to gas” – declined to comment citing party politics.

Energy Secretary Ed Miliband recently told the BBC: “There is only one route to get bills down which is to go for clean power, home-grown, clean energy, that we control so we’re not at the behest of the petrostates and the dictators.”

Mr Vince said he “absolutely agreed” with that statement but added: “We don’t control our own prices now and won’t until we actually break this link. Waiting for gas to ‘go away’ is not the answer even if it could actually work – 2030 is too late. I’ve heard no good reason from anyone in government for not breaking the link. Now. Even Boris Johnson could see it – describing the gas price link as ‘frankly ludicrous.’”