In an interview we publish today, Sir Roger Carr, the new president of the CBI, warns that the rising cost of energy will lead to many British manufacturers relocating their businesses abroad. He is right to sound this warning – for it is not just business that will affected. As Christopher Booker has pointed out many times in this newspaper, the Coalition’s commitment to phasing out the production of energy based on burning fossil fuels is going to cost at least £100 billion over the next 18 years.
David Cameron’s determination to make the present Government “the greenest ever” will increase each household’s electricity bill by at least £200 a year. But it will cost industry far more to comply with the carbon reduction targets that have been imposed as legally binding by the Coalition. One consequence, as Sir Roger suggests, is that manufacturers who use large amounts of electricity (which is to say, just about all of them) will move to countries where power is cheaper. Britain will end up importing the goods rather than making and exporting them, the country will be poorer, and the world’s output of CO2 will not have diminished one iota. We will have made a futile gesture: one that hurts Britain, to no benefit for anyone. Indeed, we will not even profit from the increased sales of wind turbines, since they too will be made abroad, where the costs of doing so are lower because energy is cheaper.
The Coalition’s carbon-reduction targets may have seemed sensible, or at least ethical, at the time that the decision to implement them was made. But the evidence suggests that this is no longer the case: instead, they are going to inflict grave economic harm, without significant benefits. We hope the Government will recognise its error, and modify its energy policy accordingly.