Rachel Reeves’s Poison Pill

Commenting after Rachel Reeves presented her second Budget to Parliament, Maurice Cousins, Campaign Director at Net Zero Watch, said:

The decision to retain the windfall tax on North Sea oil and gas is catastrophic and deeply cynical. It accelerates decline, deters investment and erodes one of Britain’s few remaining productive tax bases. This will deepen import dependence, expose consumers to global volatility and weaken national resilience.

Security experts, including General Sir Richard Barrons, the co-author of the Strategic Defence Review, have been explicit that Britain must urgently rearm and rebuild capacity. Yet accelerated North Sea decline will damage the primary sectors that defence depends upon, including steelmaking, chemicals and heavy industrial supply chains. All of this while Russia is outproducing the West in shells and military vehicles.

National security and prosperity are being sacrificed on the altar of Ed Miliband’s Net Zero delusion.

The rest of the Government’s energy proposals are a sham. They achieve a reduction in bills by moving some subsidy costs to general taxation, thus hiding the problem of high costs rather than reducing them. In addition, the measure is temporary, and will be cancelled just as power is handed over to a new government. This makes it look like a poison pill - a trap for whoever has to pick up the pieces left behind by Ms Reeves and Mr Miliband.

Importantly, almost none of the structural drivers of high bills are fixed. The burden is merely disguised through higher taxes, storing up greater pressure for households and businesses in the years ahead. The government has no mandate to do this. It was elected to fix the root causes of the cost of living crisis. 

The only concrete measure that will reduce the overall burden on the public is the cancellation of the disastrous Energy Company Obligation scheme, which will save the average household just £60 per year. However, much of this saving will be negated by cost increases in other parts of the energy system.

Overall, this package does not cut real energy costs. It does not lift growth. It does not strengthen security. It accelerates national decline.

ENDS