The tricky politics of cutting our fuel bills

Peter KellnerPresident
December 02, 2013, 9:17 AM GMT+0

It’s the process as much as the policy. The Conservatives may not gain as much as they hope from George Osborne’s plans to cut domestic fuels bills by an average of £50 a year. This is because recent YouGov polls for the Sunday Times and Prospect suggest that what is currently driving public opinion is not only the price of gas and electricity, but deep distrust of both the Government and the energy companies.

Let’s take the specific policy first. Our latest survey for the Sunday Times shows that the ‘green levy’ is not popular. Given three options, only 17% want the levy to continue in its present form. But a further 38% still want the same amount spent on measures to tackle climate change, but want the money to come from general taxation rather than fuel bills; so 55% back the spending in principle. Only 32% want green spending scrapped altogether. It looks, then, as if the Chancellor has got the balance about right, cutting the typical family’s fuel bills by £1 a week, by using part of the government’s better-than-expected finances to maintain green spending.

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But the politics of fuel prices and climate change goes deeper than that. David Cameron has a particular problem. In opposition he promised the ‘greenest government ever’. He told voters: ‘vote blue, go green’. Today, only 16% think we now have the greenest ever government. Among Tory voters the number is higher, 33%, but well short of a majority.

The Prime Minister still insists on his devotion to a green future; but by almost three-to-one (58-21%), we think that he does not really believe in environmental policies but says he does ‘for political reasons’. This week’s Autumn Statement risks reinforce public scepticism, if voters regard the switch in green funding as a panicky, tactical reaction to Ed Miliband’s promise of a fuel price freeze rather than the latest chapter in a clear and consistent narrative.

Indeed, the Conservatives (and Liberal Democrats) may have problems defending this week’s switch in funding of the green levy if voters think the cost should be borne by the energy companies rather than the taxpayer. Consider this question that YouGov asked recently for Prospect:

“Britain’s major energy companies are raising the price of gas and electricity this winter by 8-10%. They say that their prices are determined by

(a) general energy prices in world markets over which they have no control,

(b) “green” rules and levies imposed by successive governments to reduce carbon emissions and

(c) the need to find money to invest in future power supplies and avoid blackouts in years to come.

Critics of the companies say that the real reason they are putting up prices is to protect excessive profits, and that they could well afford to keep prices down and still afford to buy energy on world markets, meet their “green” obligations and afford investment in future energy

A clear majority, 57%, sides totally with the critics. A mere 3% think the companies are right – while 30% think the companies have a case but are raising prices more than they need to.

However, the next question shows that most people are reacting against the storytellers rather than the three elements of their story. We asked respondents to imagine that our energy was supplied by not-for-profit companies owned by their customers. In those circumstances, big majorities recognise that our gas and electricity prices would need to reflect world energy prices, include “green levies” and generate money for investment – and even add more to our energy bills in order to limit our reliance on imports in the long term.

The figures relating to green levies are particularly striking. All else being equal, people would prefer cheaper energy bills. But there is a broad consensus that embraces young and old, men and women, north and south, rich and poor, that if such levies would be justified if they were part of a long-term plan operated by companies they respected. This is a specific example of the wider point that our horror at the bills we will face this winter flows from our perception of corporate greed more than price rises per se.

All of which suggests that Ed Miliband should be basking in public adulation for being pro-green, pro-price-freeze and anti-fuel-company greed. However, he too has a story/storyteller problem. For while two-thirds of voters regard a freeze as a good idea, most people who like it in principle think it ‘risky in practice given the volatility of energy prices in world markets’.

When we add together those who regard the idea as nice-but-risky (36% of the total electorate) and those who think government price controls a bad idea (24%), then six out of ten voters are sceptics. If Miliband is to win the next election, he must convince more voters not only that his policies are attractive but that he knows how to make them work. Above all, this means persuading many more people that he is up to the job of Prime Minister.

Our political leaders, then, are right to detect the political sensitivity of fuel prices. But they should beware of interpreting public opinion too simply. Yes, voters like any help they can get coping with the cost of living. But what they want even more is competent, clear-sighted political leadership. A pound a week off our fuel bills, like the promise of a 17-month post-election freeze, is all very well. But it will attract electoral dividends only if it can be presented as part of a responsible and lasting approach to a continuing problem. Which is why the choice of immediate policy is only part of the challenge. Restoring trust is the bigger task, and the leaderships of all three main parties have a huge amount to do.

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