Douglas Carswell

22 SEP 2015

Osborne's Subsidy for Failure

George Osborne is in China this week, proving that politicians can't do business. Yesterday he announced £2 billion of public subsidy for a new nuclear power station at Hinkley Point - to be built by French and Chinese state energy firms. He calls it "another move forward for the golden relationship between Britain and China." But who gets the gold?

Government subsidy makes nuclear energy vastly more expensive than the alternatives – and taxpayers and consumers foot the bill. The Government estimates the minimum price it will pay for energy from Hinkley Point at £89.50/MWh – double the current average wholesale energy price of £44.72/MWh. To quote the BBC's Robert Peston, Hinkley Point energy looks "scarily expensive."

But it gets worse. The Government is relying on France's state-backed EDF Energy to deliver the new power station on time and on budget. Yet EDF has a track record of failure. Its new nuclear plant at Flamanville in France, scheduled to open in 2012, is now more than three-times and €7 billion over budget, and still isn't running. EDF's tie-ups with its partners in China aren't going smoothly either, with serious concerns arising over safety.

Moreover, the Chancellor is effectively handing over our energy production to foreign governments. We will now be relying on France and China – both going through economic crises - for our electricity. So much for our energy independence and security.

Yet misguided nuclear subsidies are not enough for the Chancellor. He also backs subsidies for all varieties of renewable energy – some costing taxpayers and consumers over £300/MWh. All the while, the price of oil has fallen to under $50 per barrel and looks set to stay low.

Household energy prices should not be an issue right now. They have been kept high by cross-party collusion with Big Energy. Since Ed Miliband's 2008 Climate Change Act – supported by the Tories – UK consumers have been forced to fork out up to £18 billion every year for inefficient energy providers.

Government subsidies are the kiss of death for any industry: whether cars, or banks, or food. They remove any incentive for producers to compete, and ensure that they will never be able to survive without taxpayer support. Energy is no different. By supporting massive subsidies for renewables and nuclear, the corporatist consensus at Westminster ensures that they will never be a sustainable alternative to fossil fuels.

UKIP is the only party that stands against subsidy, and for lower energy prices. As such, UKIP is also the only party that is truly in favour of renewables and energy diversity.

Time to cut the cords of corporatism, and set energy free.

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