Labour: UK households hardest hit in G7 by energy price hikes

British families and businesses have been more exposed to inflation and economic pressures because of the Conservatives’ failure over thirteen years on energy, new analysis by the Labour Party has revealed.

Throughout 2023, the UK has suffered from the highest sustained level of inflation of any major economy in the world. Part of the reason for why the UK has been so badly hit is because our economy is more vulnerable to global energy shocks due to 13 years of failed energy policy.

Since September 2021 and the beginnings of the energy price hit, energy bills for British families have risen by 62%, considerably more than in any other G7 country. This has been in a large part due to the Conservatives’ failure over the last decade to invest in clean energy, which would have made Britain less exposed to rising fossil fuel prices and the manipulations of dictators like Putin.

The Conservatives’ decision to ban onshore wind in 2015 has inflated energy bills by £180 a year for every family in England and made the UK more exposed to the global market.

Labour has proposed concrete solutions to each of the Conservatives’ supply-side failures on energy, to bring down costs for hardworking families. Labour’s mission to make the UK a clean energy superpower will save families and businesses £93 billion over the rest of the decade, cutting bills and easing cost pressures.

Ed Miliband MP, Labour’s Shadow Climate and Net Zero Secretary, said:

“Every family and business across Britain is paying the price for the Conservatives’ failure to protect our energy system from global shocks.  

“Rishi Sunak is just the latest in a long line of Tory Prime Ministers who have worn down our economic security.

“The only way to end the cost of living crisis for good is to get rid of Rishi Sunak and elect a Labour government. Labour will bring down the cost of energy and cut bills by making Britain a clean energy superpower.”

Ends

Notes

Inflation in the UK is currently the highest in the G7 (8% compared to a G7 median of 5%). Energy bills for British families have risen by 62%, much more than in any other G7 country.

1. Failure to invest in clean energy

• Under the Conservatives, barriers to clean energy have hindered capacity, driving up prices. High energy prices contribute to higher prices for other goods, as the last two years have demonstrated.

• Increase in consumer price of energy since September 2021

• Source: OECD https://data.oecd.org/price/inflation-cpi.htm

• The Conservative ban on onshore wind has raised bills by £180 a year for every family in England. It crashed the market by 97 per cent and has resulted in 7GW of lost capacity - equivalent to two nuclear plants - since being implemented in 2015.

• The last Labour Government gave the go-ahead for new nuclear sites in 2009, but under the Conservatives none have yet got up and running. The Government’s dither and delay has denied us clean, reliable power.

• It currently takes around 13 years to develop a new offshore wind farm, with up to four of those years spent fighting through the planning system. The time taken to approve major national infrastructure projects has risen under the Tories from two and half years to well over four.

• As businesses seek to move ahead in the industries of the future, the queue for grid connections is growing out of control, with more than £200 billion worth of privately funded projects stuck. New grid connection dates are now being offered for 15 years’ time, in the late 2030s.

• UK electricity generation per person is significantly lower than in comparable countries – the lowest in the G7 except Italy (which has also suffered from high energy price inflation).

• This has left the UK with some of the highest electricity prices of any major economy. Even before Russia’s illegal invasion of Ukraine, UK businesses faced the highest electricity costs in the G7, having soared by 72 per cent between 2010 and 202123; a £3.5 billion per year energy premium compared to our competitors.

• Since September 2021, when Labour first announced its Green Prosperity Plan to invest in energy security and lower bills,energy bills for British families have risen by 62%, much more than in any other G7 country. (The median G7 increase was 28%). If bills had risen at the typical rate, families would be saving £500 a year off their energy bills.