- Britain is being crippled by high energy prices – our industrial power prices are 90% higher than the European average, and household bills 20% higher
- A new report from the Centre for Policy Studies argues that a huge part of the problem is that the power market has become ever-more dominated and dictated by the state
- It shows how Ed Miliband’s Clean Power 2030 project is reshaping our grid according to ideology, rather than the interests of consumers – embedding subsidies and central planning as permanent features of the system
- With electricity demand projected to double by 2050, the need for cheap energy has never been greater. Yet Miliband risks driving bills higher, not lower, with his reckless 2030 sprint
- ‘Power to the Markets’ argues that there is a lower-cost, subsidy-free future for the UK power market – but that we need a radical change in philosophy to deliver it
Labour’s ideological approach to Britain’s electricity market risks raising prices for households and could prevent the country from meeting growing demand at the lowest cost, according to a new report.
‘Power to the Markets’, published today by the Centre for Policy Studies, with support from the European Climate Foundation, argues that central planning and politically motivated subsidies are damaging our ability to deliver new generation to meet our future electricity needs at the lowest cost to consumers. The major energy firms have already warned that if we continue on the current course, bills will rise substantially in the coming years.
The report, written by CPS Head of Energy and Environment Dillon Smith and researcher Sean Ridley and endorsed by the Rt Hon Claire Coutinho MP, sets out a new centre-right vision for energy policy.
Highlighting figures from the National Energy System Operator (NESO) showing demand for electricity is projected to be a third higher by 2035, it argues that it is crucial that this new capacity delivers energy as cheaply as possible, rather than continuing the current subsidy regime – which, despite being intended as a temporary boost to new technologies, has now become a permanent feature of the markets.
The report argues that all technologies should compete on a level playing field, bearing the same set of risks and costs so that the cheapest ones win out. That taxpayer subsidies should have clear end dates. And that the Government’s primary role should be in ensuring security of supply, not dictating every detail of energy pricing and provision.
The report sets out the flaws in Ed Miliband’s plans for Clean Power 2030 and Great British Energy, and highlights the growth of a new market of entirely private, unsubsidised energy deals which are already delivering wind and solar projects in Britain and elsewhere.
It also has particular criticism for the arrangements for the Sizewell C nuclear reactor, which despite claiming to embed private sector rigour, will in fact see the British and French states providing 94% of the funding and the former taking the largest ownership stake, while guaranteeing bumper profits to the private sector even if construction runs significantly over budget.
Dillon Smith, CPS Head of Energy and Environment, said:
‘Ed Miliband has been promising his 2030 targets will lower household energy bills, but nothing the government has done after 18 months in office will deliver that.
‘Instead of listening to what works and letting private investors fund new energy generation, Labour are doubling down on the regime of subsidies and central planning that has left us with energy prices 90% higher than the European average.
‘There is a world of energy abundance out there, but Britain needs radical change to its energy policy to reach it.’
Rt Hon Claire Coutinho MP, Shadow Secretary of State for Energy Security and Net Zero, said:
‘This interesting report from the CPS makes a powerful argument to return to market principles in our energy system.
‘Our energy policy comprises a complicated web of taxes, subsidies and regulations which have driven up the cost of energy in Britain. We need a system that favours competition, drives the best prices for consumers and prioritises cheap, reliable energy.’
ENDS
NOTES TO EDITORS
- ‘Power to the Markets’ is available under embargo here
- The authors would like to thank the European Climate Foundation, whose support made this research possible, though the report’s findings and recommendations are those of the Centre for Policy Studies alone
- Dillon Smith was Head of Energy and Environment at the CPS but will shortly join the Conservative Environment Network. Sean Ridley is Energy and Environment Researcher at the CPS.
- For further information and media requests for other CPS spokespeople, please contact Melisa Tourt on 07399 251110 or [email protected] or Emma Revell on 07931 698246 or [email protected]
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, housing, immigration, and energy abundance, its goal is to develop policies that widen enterprise, ownership and opportunity
Date Added: Sunday 22nd February 2026
