Fuel Poverty Action (FPA) reacted angrily when the UK prime minister, David Cameron, said he would act to cut fuel bills. Why?
FPA campaigns against higher fuel bills that hurt the poor – or does it? Cameron said he would ‘cut the green crap’, meaning the ‘green levies’ that are added by law on fuel bills. Fuel Poverty Action, supposedly the friend of the poor, denounced the proposed cut.
FPA is organising protests against high prices in central London on 26 November, but its own policy seems to support higher prices. How did it tie itself in these knots? The answer is that FPA’s campaigners support the green levies on fuel bills.
Green levies on fuel bills were brought in by the New Labour government to finance the transition away from fossil fuels to renewable energy. They make up nine per cent of the cost of the average fuel bill, currently running at £1,300 a year.
It is easy to see how FPA and other defenders of the green levies have painted themselves into this corner. The levies are supposed to fund investment in wind power and other renewables, and also to pay for government schemes to insulate people’s houses so that they can cut their fuel use.
The problem is that both of these are long-term goals which – it is hoped – will cut the cost of fuel for households. But in the here and now they are adding to the cost of electricity bills. Green campaigners like FPA end up calling for higher fuel bills so we can have lower fuel bills. In 1947, the then president of France, Charles de Gaulle, said something similar: ‘We must all tighten our belts if the standard of living is to rise.’ A few days ago, the Guardian wrote about ‘green levies, which go towards… helping the poor cut their usage’.
Green campaigners have long known that there is a problem with their goal of reducing consumption, namely that it is unlikely to be popular with the vast majority of people, who are also consumers (it was a point that was hotly debated at the ‘climate camps’ – the annual green get-togethers – until they stopped in 2011). The point is sharply drawn in the green policy on fuel bills. Environmentalists want to see less fossil fuel burned, which means less electricity generated and higher prices. Moreover, environmentalists have long argued that prices are artificially low, and should include the cost of pollution.
The green levies on energy bills are based on those arguments. Higher fuel bills will cut consumption, and lead to smaller carbon emissions. To make their point, green protesters succeeded in blocking a proposed coal-fired power station at Kingsnorth in 2008, and won a moratorium on future coal-burning plants – and cutting back on electricity generation in turn leads to higher prices.