There are two ways to drop an album. There’s the Taylor Swift thing of leaving painstaking hints in Instagram stories and hidden Easter eggs to drive interest to a fever pitch. At the opposite end of the spectrum is the surprise album. Think Beyonce’s Lemonade or indeed Swift’s Folklore.
Policy making is similar. If Bank of England independence was a surprise release, then Liz Truss’s energy policy announcement is the inverse. We know it’s coming, but different versions have been briefed to different media outlets for weeks.
This morning, it looked like there would be a substantial package of over £100 billion but that it would be paid for over 10-20 years via a levy on bills. By lunchtime, it had changed again.
The Times’s Steven Swinford located the latest easter egg got the scoop in reporting that Truss is expected to freeze bills at £2,500 and that this will apply to all households and businesses. That figure comes from the present cap of £1,971 plus the £400 universal benefit announced by Rishi Sunak back in the spring.
Notably, the money appears to be coming from something called ‘general taxation’ (which I assume means borrowing) rather than a levy on bills. For comparison, Labour has pledged to freeze bills at the current level of for six months, paid for by an extension of the windfall tax on energy producers enjoying a stonking windfall.
Will this work? Well, Truss had to do something. We’re all free market libertarians until wholesale energy prices treble or a novel coronavirus rips through your immuno-naive population.
But it bears repeating. This gargantuan intervention, however necessary, is the price of repeated policy failure. While someone once said you can’t rustle up a nuclear power station overnight, the £100bn+ (more when you include businesses) price tag could buy you a handful of Sizewell C nuclear plants after which you’d have actual clean energy for decades, rather than a one-off subsidy.
Finally, there is the demand-side issue which risks being overlooked. Because the energy security issue doesn’t go away. We need to be using less gas where possible, and price signals help achieve that. This plan necessarily subsidises gas but clearly doesn’t create anymore. Liz Truss ruled out energy rationing in the campaign. That wish is not in her power to grant.
In the comment pages, Nimco Ali says her friend Boris Johnson’s real legacy, from girls’ education to climate change, will be felt all over the globe. While with its flashbulbs, intrigue, glamour, Jo-Anne Titmarsh says you can’t beat Venice.
And finally, Boris Johnson and his cakeism may have departed, but why should you suffer? We bring you the best bakeries in London.
