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 was, until February 2026, Head of Energy & Environment at the Centre for Policy Studies. He has written extensively on energy, transport, and Net Zero. He has a background in finance, having worked previously in debt capital markets at Deutsche Bank in London and New York. He holds a masters degree in Public Administration from LSE and an undergraduate degree in Public and International Affairs from Princeton University.
Sean Ridley is the Energy & Environment Researcher at the CPS. He has professional experience as a forensic accountant in Australia. He holds a masters degree in Public Administration from the London School of Economics and Political Science and an undergraduate degree in Accounting and Economics from the University of Western Australia.
