Britain’s energy policy has hit a brick wall called ‘the real world’. Andy Maciver argues that the war in Iran means we need to invoke the ‘spirit of Covid’, where we think the unthinkable and do the undoable.

I can’t muster too many good memories from Covid. It was a dismal couple of years and the consequences are still with us. The prolonged closure of schools (much longer than in other countries) may yet be seen as the most consequential public policy mistake of our time. Taxpayers are still servicing the eye-watering government debt which was taken on, and we likely will be for the rest of our lives. And of course, on a human level, there cannot be many of us who do not know of someone - perhaps someone close - who died prematurely from Covid or something associated with Covid.

So, it is a time to forget. Except for one thing; it showed that the British and Scottish governments have the ability to think the unthinkable and do the undoable, and do so quickly. They have the ability to create a blank sheet of paper from a tablet of stone when the situation really, really demands it. That spirit of Covid can be bottled and re-deployed when a situation presents itself which is serious enough to demand something truly radical.

That situation is now upon us in the form of energy bills, and the pervasive role they play in the worsening cost-of-living crisis experienced by people in this country. When we hear observers say “Britain has the highest energy prices in the world”, this is not a piece of throwaway rhetoric. It is true. Measured against other members of the International Energy Agency of developed countries, and against EU countries, we have the highest industrial and domestic electricity prices.

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Some countries (Germany most notably) are not too far behind us, but an analysis of the electricity price in some other countries would make your temperature rise so high you could switch your radiators off. Prices in Denmark, Finland, France, Greece, Slovakia, Poland, Japan and New Zealand are around half of ours. In Korea, Hungary and Canada they pay around one-third of our bills. In Norway - perhaps the country most comparable to Scotland given its history with energy - electricity prices are not much over one-quarter of ours.

The question, of course, is why? Why are we told, on the one hand, that oil and gas have made us rich for the last 50 years, that renewable energy will make us rich for the next 50 and beyond, and that our island status gives us a global advantage in the creation of energy, but on the other that the energy bills that land on our kitchen tables are a fait accompli?

Our politicians, north and south of the border, have become very well drilled in telling us that there is really nothing they can do about it. It’s not our fault, it’s because of high wholesale gas prices. It’s not our fault, it’s because we have to pay to upgrade the electricity grid. It’s not our fault, it’s because we have to subsidise the renewables revolution while it gets off the ground.

But if this were a fait accompli in the way we have it presented to us, then why isn’t every peer country experiencing the same phenomena? Indeed, why are peer countries who are not rich in energy production, as we are, suffering so much less?

We are now beyond the point where we can accept our political leaders telling us that this is just the way it is. We should have moved beyond that point after the war in Ukraine led to a rocketing of the wholesale gas prices, and therefore of our energy bills.

The war in Iran is the straw that must break the camel’s back. The squeeze on disposable incomes in Britain - across the full spectrum of earnings - is rapidly approaching the point of financial and social unsustainably. Taxes are historically high (despite the service received in return being historically low), the bloating areas of public spending (primarily welfare and health spending) are increasing inexorably, and there is little-to-no sign of any meaningful economic growth.

It is incumbent, therefore, for leaders in Scotland and the UK to work together to tackle one of the most crippling slices of the household pie chart, and that is energy bills.

Parts of this are in the ‘no brainer’ category. We are, today, actively rejecting the extraction of gas from domestic waters in the North Sea in favour of importing it from elsewhere. In large part this is from Norway, across the other side of the imaginary fence in the Sea. That is economically braindead, but at least it is secure and is relatively neutral from an environmental perspective.

However, by the end of this decade, 20 per cent of our gas is due to be imported from Qatar. The emirate is lucky enough to have in its waters the world’s largest gas reserve - North Field. Earlier this week, as the war centred on the Persian Gulf, Qatar paused production at North Field. So, as well as being economically braindead and environmentally braindead, importing gas from Qatar is not even secure anymore.

Britain has a cow in the kitchen, yet we look around for someone else to hawk us a couple of steaks. It is insane.

So, we can start with the easy stuff, even if its impact will take a while to filter through. The Prime Minister and the Chancellor could, today, scrap the Energy Profits Levy and give the energy industry the green light to extract every drop of oil and gas from the North Sea, which will also allow it to invest in renewable energy. 

Our First Minister, meanwhile, could make clear that his government’s ’climate compatibility test’ is dead. Importing gas from afar is not climate compatible, and nobody signed up to waving an “I saved the planet but I can’t heat my house” placard.

If fuel poverty subsidies are to remain a feature of energy bills, it would be cheaper and smarter to promote domestic batteries which can store cheaper overnight electricity rather than heat pumps, which gobble the expensive peak-time variety. Better still,  solar panels: there’s no better hedge against price and security instability than being a producer of electricity, rather than a consumer of it.

This ‘blank sheet of paper’ approach should be adopted with every single component of Britain’s energy bills. 

 We all want to forget Covid, I am quite sure. But we should remember what it taught us - nothing is inevitable, and nothing is undoable.

Andy Maciver is Founding Director of Message Matters, and co-host of the Holyrood Sources podcast

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