A new analysis highlights how soaring energy costs and policies prioritizing so-called renewables are contributing to Britain’s economic stagnation and deindustrialization.
| PULSE POINTS |
❓ WHAT HAPPENED: Britain is on a “path to impoverishment” as soaring energy costs and declining consumption threaten to drive deindustrialization and economic stagnation, according to a new report from the Institute of Economic Affairs. Britain now has the highest industrial electricity prices in the developed world, while overall energy consumption has fallen 29.2 percent since its 2005 peak and industrial use has plunged 45.3 percent since 2004. 📺 DETAIL: The report found that Britain uses roughly half as much energy per person as the average high-income country, with energy consumption per capita falling by 2.4 percent annually between 2008 and 2024 while GDP per head grew by just 0.4 percent a year. Net Zero and energy-related subsidies have cost an estimated £585 billion (~$790 billion) over many years. It is believed that renewable subsidies, carbon taxes, and the costs of balancing and expanding the electricity system have contributed to higher prices. The cost of maintaining grid stability and backup power could rise from about £4 billion (~$5.4 billion) last year to more than £12 billion (~$16.2 billion) annually by 2030 as Britain becomes increasingly reliant on intermittent wind and solar power. The Labour Party government has defended its green agenda energy strategy, however, insisting that net zero represents a major economic opportunity. President Donald J. Trump has repeatedly urged Prime Minister Andy Burnham and his predecessor, Sir Keir Starmer, to reopen Britain’s North Sea oil and gas fields, but Burnham has delayed making a decision. 💬 KEY QUOTE: “Cheap and abundant energy is a fundamental prerequisite to a thriving and prosperous economy.” – David Turver, Institute of Economic Affairs 🎯 IMPACT: The report warns that Britain’s reliance on so-called renewable energy sources, which are intermittent and require costly infrastructure, is exacerbating the country’s economic challenges. Falling energy consumption is a sign of industry slowing down, which will have a knock-on effect on overall wealth and employment. |
Image by Kirst O’Connor / No 10 Downing Street.
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