Fracking is back!

I am not entering into a political ‘tennis match’ of reactions to the government’s announcement of an energy price cap freeze, but l will quote University of Bath economist, Professor Chris Martin, who has commented on the news that a typical household energy bill will be capped at £2,500 annually until 2024. This is expected to cost up to 150 billion.

Commenting from Bath he said: “The announcement of the guarantee that the average household will pay no more than £2,500 in energy bills is welcome but it is vague. At this stage, we do not know the full details, although some things are clear:

“The commitment will be extremely expensive; we cannot say what the cost will be, since it depends on the war in Ukraine and other factors, but it is likely to be more than £100 billion and possibly close to £150 billion. To put this in context, the job furlough scheme put in place during the Covid-19 pandemic cost around £70 billion. 

“It is not clear how the scheme will be funded, but there are no plans for a windfall tax on energy producers. This is likely to be highly controversial since their profits have increased substantially over the past year. It seems that the cost will be met through additional borrowing, to be repaid by taxpayers over time.

“There are plans to increase some aspects of energy production, but these are likely to prove equally controversial since they do not appear to include plans to reduce the demand for energy, through measures such as increased home insulation. This would be an effective and relatively cheap way of reducing energy bills.

“It seems that supply is to be increased through increased extraction from the North Sea and from fracking. There are no plans to increase the supply of ‘cleaner’ energy through wind and solar farms.”

3 Comments

  1. Hi Richard,
    I think quoting one local economist’s comments on the energy price cap freeze is tantamount to the first serve in “..a political ‘tennis match’ of reactions..”. Anyone for political tennis?

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      1. I was quite surprised to read this ‘fact’, these ‘facts’, on your blog. The only fact that I could identify in your post was that Professor Martin had broadcast his opinions on the proposed energy price cap freeze. The following seem to be his opinions – that “the guarantee announcement is vague”, that ” it is likely to be possibly close to £150 billion”, that “the commitment will be extremely expensive”(relative to what – no commitment to a cap freeze?), that “no plans for a windfall taxi is likely to be highly controversial”, that “supply is to be increased through increased extraction from the North Sea and from fracking(he adroitly omitted to say that this was an interim emergency measure whilst the provision of clean energy was being ramped up to cover all business and domestic needs)”.
        My point is that such reporting of one economist’s thinly veiled criticism of government policy is not really independent, is it? I expect to find such reporting in those national newspapers whose very existence depends on undermining current government policy, but not in the BathNewseum blog, which incidentally, I rate very highly. I beg you to keep it local, and keep it balanced(well, what I call ‘balanced’).
        Even if you don’t, I will still enjoy your blog, as it provides the grist to Bath life’s mill.

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