Thread by @Gilesyb

Quick thread on my bit about blaming energy policy for soaring bills. Some pts:

1. Energy bills cut through like nothing else. Remember how @Ed_Miliband's price freeze of 2013 upended the debate? And today's rises are WAY higher...1/ instituteforgovernment.org.uk/blog/how-much-… via @instituteforgov

As @ChrisGiles_ pointed out in our podcast, the rise coming in April may amount to 4% of disposable incomes -the sort of hit you only normally see in a recession

2. Voters can't help seeing energy prices as government business

2/

instituteforgovernment.org.uk/podcast

3. The price cap has shielded households from the immediate impact of soaring gas prices. And these have soared FAR past the levels that DECC forecast they might reach in 2013-5 when planning energy policy. Forecasts of high and variable prices were jeered at back then by many 3/

4. The cap led to corporate failures. But the level of company entry into the market was excessive up to 2018, and didn't lead to much real innovation - just price tariff innovation/confusion.

5. The amount to be competed over once unavoidable costs removed isn't much... 4/

6. The insolvency system, SOLR, worked in normal times, but the costs that are spread across the system were low then. Now they're very high (billions) and the system buckles.

7. Prudential regulation and equity requirements were too low. Too many fly by night businesses 5/...

...that didn't hedge responsibly and left all the surviving companies/their customers carrying the can. Ofgem tightened the system in 2019 but could have done more.

But 8. The price cap isn't why we now face higher bills. And 9. Nor is net zero 6/

As @ab4scambs says, the answer to a gas crisis isn't more gas. More storage wouldn't have stopped prices shooting up - and costs £££

And while more cheap wind would be nice, we installed LOADS. The loudest critics today were berating us for doing too MUCH wind in 2013! /ends