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UK Govt’s green subsidy ‘reform’ punishes the poor and benefits the rich

March 30, 2023

By Paul Homewood




London, 30 March – Commenting on today’s package of energy policies released by the UK government, Net Zero Watch warned that Rishi Sunak and his colleagues appear to have learned nothing from the bitter experiences of the energy cost crisis and are ignoring the growing burden of renewable energy.

In spite of unassailable evidence that renewables costs have not fallen, the Government not only intends to continue providing billions of pounds of subsidies, but also proposes to implement Boris Johnson’s original plan to shift the green burden onto gas bills.
As a result, heating will become even less affordable for millions of poor households.
The government evasively refers to this plan as “rebalancing” (Powering Up Britain, p. 63) gas and electricity bills, but Net Zero Watch observes that the effect is not cost-neutral for most natural gas consumers in middle- and lower-income households, for the following reasons:
1. The new tax will increase total household energy bills for those currently using gas. A substantial minority of households do not use gas at all, and will not pay the new gas tax, so their current share of the electricity subsidies will be transferred to those households using gas.
2. Better off households will be able to avoid the new gas tax by switching to electric-powered heat pumps. Their share of the gas tax will then be transferred to the remaining gas consumers, who will tend to be in lower income brackets, and who therefore cannot afford heat pumps.



In effect, Mr Sunak’s new green subsidy reforms means that poor households will be forced to subsidise rich ones. This is both immoral and politically inept.
Dr John Constable, Net Zero Watch’s energy director, said:
"Subsidies to physically inferior renewables have, unsurprisingly, failed to bring down the cost of wind and solar energy by any significant margin. Rather than unfairly dumping the green subsidies on to poorer households, Mr Sunak should have cancelled these failing policies completely."
Dr Benny Peiser, Net Zero Watch’s director said:
"While energy analysts are warning of a renewed energy cost crisis later this year, the government seems oblivious of the growing economic pain to households and businesses. Mr Sunak and his ministers won’t be able to blame the next energy crisis on Russia; instead, the government will rightly be held responsible for its total failure to reduce the rising cost of green levies."

This is the relevant section of the DESNZ press release:


In other words, they want to shift us from cheap gas to expensive electricity. And when we have switched, those subsidy costs will get loaded back onto our electricity bills again.

This is not only dishonest, it is also illiterate from an economics standpoint. The subsidies that they want to shift are part of the cost of producing electricity. They have nothing to do with gas at all, so the government might just as well transfer them onto the cost of food or housing.

Gas is cheaper then electricity for a very good reason. We should not be interfering in the free market in this way. It will result in a misallocation of resources by transferring them from an efficient sector to an inefficient one.

  1. ancientpopeye permalink
    March 30, 2023 12:27 pm

    Sunak and Hunt and the rest of the rabble must go, they should have realised by now, we are not all millionaires?

    • Michael permalink
      March 30, 2023 12:55 pm

      They are just “following orders” as laid down in the globalists’ playbook. We don’t have an ice cube in hell’s chance of getting rid of them unfortunately.

    • Chris Phillips permalink
      March 30, 2023 2:19 pm

      But if/when they do go they’ll likely be replaced by a Labour Govt with extreme eco-zeolot Milliband as energy minister. Things will only get worse then!

      • Realist permalink
        March 30, 2023 3:15 pm

        That is a problem with all political parties in Europe. They seem determined to destroy economies and make life as difficult and as miserable and as expensive as possible for their own populations.

        >>extreme eco-zeolot

      • Phoenix44 permalink
        March 30, 2023 3:57 pm

        Miliband is one of the stupidest politicians on this Earth. His almost complete and total inability to understand things is extraordinary.

    • March 30, 2023 3:10 pm

      ….all 656 of them and their equivalent useless idiots in the HoL…

    • Phoenix44 permalink
      March 30, 2023 3:55 pm

      They are bewitched by this Net Zero stuff and take us for fools. Adding tax to gas so that it becomes more expensive than renewables, so that they can claim renewables are cheaper so that when they force us to have more renewables they can claim they are bringing costs down. That bills will still be higher than they were five or ten years ago doesn’t matter.

      • March 31, 2023 11:45 am

        Are the renewables going to take the credit for the rolling blackout/brownouts that are almost unavoidable at this point unless the increasing use of electricity for space heating is reversed, we save older fossil generation from closure as well as run them as baseload plant instead of load-following e.g. the farce of the coal in hot standby and there is a dash for new fossil generating capacity in practice we going to need to new coal capacity which I would design to be retrofittable to use nuclear when the SMR technology is ready?

  2. Realist permalink
    March 30, 2023 12:32 pm

    ALL of the “green” and “climate” subsidies and taxes should never have existed in the first place.

  3. Thomas Carr permalink
    March 30, 2023 12:34 pm

    Not exactly on topic but are we looking at fiscal drag when it comes to the huge difference between wholesale gas prices and the cost to the domestic gas consumer? The sort of fiscal drag that made petrol distributors and suppliers reluctant to follow the price of a barrel of oil when it went down but quick to increase the price at the pumps when world oil prices increased. At least nowadays the pump prices at supermarkets seem sensitive to moves either way.

  4. ThinkingScientist permalink
    March 30, 2023 12:41 pm

    Per kWh my gas is currently four times cheaper than my electricity.

    And gas burnt at home for heating is very, very high efficiency.

  5. gezza1298 permalink
    March 30, 2023 12:47 pm

    Why would millionaire Sushi – with the billionheiress wife – or his millionaire chum kHunt know anything about the cost of living crisis created by government policy? If we can’t hammer some sense into the Tories at the elections in May then it only leaves mass abstention from the 2024 election to send a signal to the out of touch politicians. Maybe Berlin has shown us the way with their referendum last weekend. When campaigning starts next year we could also be very aggressive when any of them try to pitch to us.

  6. Phil O'Sophical permalink
    March 30, 2023 12:49 pm

    Why do people continue to be state or be surprised that ‘politicians have learned nothing’ from blah, blah.

    Of course they haven’t. They know exactly what they are doing, across the board; it’s deliberate degradation of our living standards, life styles, and general well-being, towards a future determined by monied psychopaths elsewhere, whilst forever pushing challenges into the long grass by pretending they have out best interests at heart. The latter could not be further from the truth. It genuinely amazes me that so many cannot see what is out in the open right in front of them. The old adage, ‘look at what they do not what they say’ has never been more true.

    • Matthew permalink
      March 31, 2023 9:25 am

      Well said.

  7. gezza1298 permalink
    March 30, 2023 1:05 pm

    The West is certainly in an Alice in Wonderland world with Germany agreeing a deal with Denmark for a hydrogen pipeline to bring ‘green’ hydrogen to Germany by 2028. That is less than 5 years off although some of the others parts of the article refer to 2030 such as this:

    By 2030, the western Danish municipality of Ringkøbing-Skjern is planning to build a large energy park, in which solar and wind energy, among other things, will produce one million tons of hydrogen and hydrogen-based substances such as ammonia every year.

    We do seem to be accelerating to peak lunacy with Germany needed 14,000km of new power transmission lines to connect the windmills to where the demand is. A small beacon of hope has come in Virginia where the energy company has wondered if it is actually possible to deliver the net zero energy grid that the state has mandated while still pouring money down the drain to try. they have noted that the Virginia plan rests on importing power from other states who, since they are going down the same rabbit hole, may have no spare power when required or are looking to other states to supply them. As James Donald said at the end of Bridge on the River Kwai, ‘madness, madness’.

    • March 30, 2023 3:12 pm

      “As James Donald said at the end of Bridge on the River Kwai, ‘madness, madness’”…..preceded by Col Nicholson saying “what have I done?”………..

      • Harry Passfield permalink
        March 30, 2023 5:13 pm

        Says it all. Good catch.

  8. Douglas Dragonfly permalink
    March 30, 2023 1:15 pm

    If Sunak isn’t working for that war crimial B-liar, then he most certainly is working for the World Economic Forum. In fact everything that is dictated by Net Zero is an outrageous, world wide crime against humanity.
    The COVID Plandemic did not “cause” the current systemic crisis as many fools have parroted for over a year, but has merely served as cover to obscure the real systemic causes of the long-awaited collapse and accelerate the controlled disintegration of the system as the world is prepared to transition into a “new technetronic age” which has come to be dubbed a “Great Reset” or “Fourth Industrial Revolution”.

    We are told by the likes of Klaus Schwab, or World Economic Forum trustees Mark Carney, Christine Lagarde, and Chrystia Freeland that the age of free market capitalism which reined from 1971-2020 has come to an end, and that a new epoch of “green finance” under a decarbonizing world is upon us. Under this new world order of “stakeholder capitalism” citizens will learn to own nothing and be happy, while polluting companies who commit climate sins will be choked of all credit.
    New examples attack the quantity of our lives on a constant basis.
    But until we run out of bread people accept it. And WEF knows that.

    • gezza1298 permalink
      March 31, 2023 5:27 pm

      Their big problem is when enough people decide that they will not be happy and conclude that with nothing they have nothing to lose by fighting back.

  9. It doesn't add up... permalink
    March 30, 2023 1:28 pm

    Not entirely. Whether with the agreement of government or otherwise, diesel forecourt prices have a much bigger margin than petrol – an extra 15ppl. Competition between supermarkets is reducing. My nearest Sainsbury has been undercut regularly and significantly by a nearby Shell dealer site that used to be significantly more expensive. The new owners of ASDA sites have stated they plan to be less competitive. Indeed, Tesco has been cheaper than ASDA. Having elbowed aside many smaller filling stations supermarkets are now looking to take advantage of their dominant position.

    • Realist permalink
      March 30, 2023 3:12 pm

      In the UK, that is due to higher TAX on diesel.
      In normal countries, diesel is less expensive than petrol.
      The major problem with both diesel and petrol is the TAX element of the actual price at the pump.

      >>diesel forecourt prices have a much bigger margin than petrol – an extra 15ppl.

    • Ray Sanders permalink
      March 30, 2023 11:54 pm

      “supermarkets are now looking to take advantage of their dominant position.”
      Yes I have been noticing that as well. I now fill up at a “one off” station locally (just off the A2) which is now a lot cheaper than the supermarket stations at Canterbury or Dover.

  10. Mack permalink
    March 30, 2023 1:28 pm

    So the government policy of aiming to make cheap and reliable energy more expensive than expensive unreliable energy continues apace. And think how much cheaper the former would be today in comparison to the latter if they weren’t already saddled with extortionate carbon taxes to try and make unreliables seem almost cost competitive. Insanity.

  11. GeoffB permalink
    March 30, 2023 1:49 pm

    Rishi Sunak ran Chris Hohn’s “Childrens Foundation Fund” the one that funds extinction rebellion. The day he became PM he banned UK fracking, after Liz Truss had given it approval, just to show his boss that he was a safe pair of hands! Leopards and spots springs to mind.

    • Harry Passfield permalink
      March 30, 2023 4:49 pm

      Geoff…just about on topic, but do you remember the comments by the judge in an XR case where he said he agreed with the aims of the defendants and gave them a small fine. Well. I wrote to my MP about the judge’s comments and he sent it on to the Minister for Justice, Edward Argar. He told me that the government could not interfere with the courts or direct them in any way and if I still felt strongly about the case I should write to the Judicial Conducts Investigations Office. Sure.

  12. March 30, 2023 3:21 pm

    Do the Tories seriously believe there is votes in this? If so they are deluding themselves. I foresee a Labour sweep when the general election comes. That will mean 5 years of madness – like today’s announcement of additional windfall taxes on oil and gas, enough to drive the last investment out of the North Sea, nominally to fund a freeze in council tax.

    At the end of 5 years, if anyone is still alive, there might be a chance for what might derogatively be called a “populist” to try to breathe life into the ashes of the UK.

    • Dave Andrews permalink
      March 30, 2023 3:53 pm

      Ed Miliband in charge of climate policy does’nt bear thinking about!

  13. Curious George permalink
    March 30, 2023 3:24 pm

    UK Govt’s green subsidy ‘reform’ punishes the poor and benefits the rich,
    Isn’t it the whole point of anything “green”?

    • Phoenix44 permalink
      March 30, 2023 4:03 pm

      I’m not sure its the point but it is pretty much inevitable as Greens seek to ban everything that makes the cost of living bearable for the poor – cheap food, energy and personal transport. And they do so to favour the things they value but the poor generally do not. It is immoral and unpleasant, but weirdly, these days, that makes you virtuous, even on the Left.

      • Harry Passfield permalink
        March 30, 2023 5:17 pm

        But there must be poor Greens. I look forward to their enlightenment.

      • chriskshaw permalink
        March 30, 2023 11:57 pm

        Mot sure. Many are already donning hirsute shirts and saying bring it on. We’re doomed mr mannering.

    • Realist permalink
      March 30, 2023 6:02 pm

      The whole point of the “green” and “climate” obsessions seems to be to punish _everybody_. It just has less effect on those who are actually rich.
      >>UK Govt’s green subsidy ‘reform’ punishes the poor and benefits the rich,
      Isn’t it the whole point of anything “green”?

  14. Phoenix44 permalink
    March 30, 2023 4:06 pm

    All of this could be avoided by that thing many on here say they hate, a Carbon Tax. But a Nobel Prize winning economists have shown, simply put in place a proper carbon tax, with a reduction in taxes elsewhere, and let markets and people decide how to behave. Yes, I don’t think we need one, but as this utter stupidity shows, it’s a far, far better solution than endless government meddling. And it would show the utter hypocrisy of renewables, as a carbon tax would make their manufacture and installation much more expensive.

    • Realist permalink
      March 30, 2023 6:09 pm

      That doesn’t help if people don’t buy / use those things.
      Also doesn’t help if people don^t have enough revenue to actually pay income tax.
      A carbon tax is yet another tax that just makes things more expensive.

      >>with a reduction in taxes elsewhere

  15. It doesn't add up... permalink
    March 30, 2023 4:18 pm

    The government will doubtless add a tranche of cost of living subsidy for the poorest, leaving the JAMs to bear the pain.

  16. March 30, 2023 4:53 pm

    ‘Driving bills down’ – useless babble. More taxes and subsidies drives them up, obviously. They take the public for fools.

  17. John Brown permalink
    March 30, 2023 5:38 pm

    This policy was stated quite clearly on P22 of the Net Zero Strategy – Build Back Greener :

    “Delivering cheaper electricity by rebalancing of policy costs from electricity bills to gas bills this decade.”

    We can be certain, however, that although gas prices will rise, electricity prices will not fall but will continue to rise as well.

    It is of course designed, as is the whole of the CAGW/NZ policy to make the poor, poorer and the rich, richer and given that our energy policy makers are determined we subsist on intermittent energy from renewables (no storage is being planned at all) they are clearly relying on reducing us to thid world energy poverty for their ambition to reduce our carbon emissions by 100% and thus global emissions by 1%.

    • Harry Passfield permalink
      March 30, 2023 6:49 pm

      A lie by omission: ‘Delivering RELATIVELY cheaper electricity….’

      As for reducing our emissions to (a global) 1% I’d need to know how the hell they will ever know they have succeeded. (But of course, they will always claim they are (forever) on target. I really have no words to describe the brainless fools who are forcing this on us while lining their pockets (and their ‘friends’s) and then walking away from the mess they create.

  18. Ian Cook permalink
    March 30, 2023 6:39 pm

    I think you’ll find cost increases ARE the agenda. Supermarkets acting as a cartel with price increases way above inflation, which is itself a Govt artifact, the continuing ridiculously high energy prices are hardly accidental. And the lack of ‘concern’ or actual action by Govt is very telling. So adding another layer of cost increase just continues the agenda. It is offensive to the Elite, that ‘little people’ can afford to own homes, or have savings and ‘criminally’ hand assets on to their children. A command economy and renting, is the most efficient way to make the rich, richer.

  19. John Brown permalink
    March 30, 2023 7:02 pm

    Why should it be necessary to “rebalance gas and electricity costs…with the aim of making electricity bills cheaper…” when we are told that wind power is 9 times cheaper than fossil fuels?

    • Jordan permalink
      March 30, 2023 10:59 pm

      It’s not about wind John. It’s about nuclear.
      Leccy expensive, bad for nuclear. Gas expensive, good for nuclear.
      The Government is like a new mother, fluffing up a pillow to make the cot comfortable for GBN, her new and voracious suckling.

  20. Douglas Dragonfly permalink
    March 30, 2023 8:02 pm

    Ovo Energy is planning a takeover of Shell Plc
    ’s UK gas and electricity business, a move that would allow the British retail energy supplier to reclaim the No. 2 spot in the British supply market, Sky News reported on Wednesday.

  21. Chris permalink
    March 30, 2023 10:11 pm

    6uild 6ack 6etter.

    • chriskshaw permalink
      March 31, 2023 12:00 am


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