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Pre-Spring Budget with Nicola Headlam and BBC 5 Live

Mar 13, 2023 Red Flag Alert Updated On: May 5, 2023
Pre-Spring Budget with Nicola Headlam and BBC 5 Live

Jeremy Hunt needs to deliver "everything, everywhere, all at once", in his spring statement. 

This morning Red Flag Alert's Chief Economist, Dr Nicola Headlam, appeared on BBC Radio 5 Live to play fantasy chancellor in the run up to Wednesday’s Budget. Today she was discussing how to bring down the cost of energy bills.

Three members of the public presented their ideas to Nicola, who then gave her expert opinion as to whether they would be effective and if Jeremy Hunt should be considering them in the Spring Budget.

The first idea was to use the planning system to promote and encourage renewable energy. To do this, legislation should be changed to make it law that all new commercial and residential builds must include solar panels. Not only would this reduce the energy bills of the occupants but also reduce the amount of fuel needed by energy companies. This would also create jobs in a burgeoning solar market and drive green innovation as funding solar panel development would be economically viable. As homes could create their own electricity the amount that was drawn from the power companies would decrease and lower bills.

Dr Headlam has a background in planning and was taken with the idea of using the planning system to promote renewable energy and drive growth. The planning system in the UK has not had the best last ten years and it would be a great step for the country if we started using it to implement positive change.

The second idea was for the UK government to enter the energy market. As opposed to full privatisation they would start small, with a few turbines, the energy from these would go towards helping those who can least afford their bills. Any profits would be invested back in and eventually there would be government owned power stations. Once it was a major player in the UK energy market it would use low pricing to drive down the prices of competitors.

Nicola agreed that this was a good idea in theory. She pointed out that the electrification of the UK was one of the key factors leading to the creation of local councils, as extensive planning was needed at a local level when it came to installing the national grid. Dr Headlam proposed that renewable energy generation could also be done at the local level by councils encouraging projects that would create energy for use in the local area and subsidise that drawn from energy companies. This would be a major shakeup of the UK energy market and would go towards fixing a broken system.

Finally, it was posited that we should be looking at our French neighbours when it comes to effective green legislation. In France it has just been written into law that all new carparks must have solar paneling and their legislation around the energy efficiency of homes is in advance of ours.

Again, Dr Headlam agreed that this was a good idea that would bring about a positive effect on the UK energy market. Using public and commercial buildings to create electricity and feed into the grid would reduce the amount that people would have to draw from energy companies. More energy efficient homes would further this by having to draw less power in total. By using less power and having what is used subsidised  by the power generated from an, effectively public , solar system homes would see a reduction in the cost of their energy bills. As PM Rishi Sunak has set the goal of having the strongest growth in the G7, and France is another G7 member country, we should be keeping a close eye on how they are using legislation around their energy market and renewables to drive economic growth. Dr Nicola pointed out that many countries have a much more effective energy market and legislation than the UK and there is no harm in copying what they are doing right.

Three good ideas but with one major flaw; it would take decades to see any major effects to the cost of energy. This is the sort of long term thinking that is needed but the Chancellor Jeremy Hunt must introduce programs in his Spring Budget to help in the immediate term. Families that must choose between whether to ‘heat or eat’ and SME’s that are facing insolvency due to the cost of keeping the lights on need help now.

Dr Headlam advised that the UK energy market is ‘fundamentally broken’ and a combination of short and long term solutions are urgently needed.

Tune in to BBC Radio 5 Live tomorrow when Dr Headlam will be discussing how to get over 50s back into the job market.

Many directors are worried about the energy crisis effecting their clients ability to pay their debts. Red Flag Alert is the UK's most comprehensive credit management tool and can provide the information you need to avoid bad debts caused by the cost of energy. To discover how your business could benefit from Red Flag Alert's rich data set to reduce risk and for enhanced decision making, request a free trial.


Published by Red Flag Alert March 13, 2023

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