Sir Tony Blair has urged Energy Secretary Ed Miliband to abandon his 2030 clean electricity target and cut green levies, as his think tank warns current climate policies are driving up costs for households and businesses.
A new report from the Tony Blair Institute (TBI), personally approved by the former prime minister, says the government’s commitment to fully decarbonise the electricity grid by 2030 is “destroying industry” and “hurting households”.
The intervention, which has caused furor at the Department for Energy Security and Net Zero, highlights the growing division within Labor over the pace and affordability of the party’s green transition.
The report’s authors, led by Ryan Wain, said Labour’s clean energy agenda risked pushing voters “towards populists” such as Reform UK ahead of next year’s regional elections and warned that the government’s energy policy “needs to be refocused around affordability”.
“We are in both a cost of living crisis and a climate crisis – you can’t just pick one and pretend the other doesn’t exist,” Wain said.
“Right-wing populists are already exploiting this tension. If electricity doesn’t become cheaper, the net zero policy will become toxic.”
Blair, who has made energy reform a personal focus through his institute, backed the report’s call for “cheap, clean energy” rather than the current approach, which he said has turned Britain into “a low-carbon but high-cost economy”.
The TBI report argues that environmental charges now make up 20% of the average electricity bill, up from just 8.5% in 2015, and that insurance costs now exceed the actual cost of electricity for an average household – £334 compared to £324.
It also warns that the cost of connecting the UK’s new offshore wind farms to the grid will exceed the cost of the turbines themselves, with the required mast and substation infrastructure expected to cost £112 billion.
The think tank concluded: “The trend in the UK energy sector over the last few decades has been the transformation of our electricity sector from a cheap, high-carbon to an expensive, low-carbon sector.”
Miliband, who leads Labour’s flagship Clean Power 2030 policy, reportedly reacted angrily to the publication and ordered officials to issue a statement rejecting the findings.
It is the second high-profile clash between Blair and Miliband this year. In April, the former prime minister warned that current net zero plans were “doomed to fail” due to unrealistic timetables and inadequate investment in network capacity.
Tone Langengen, TBI’s senior energy adviser, said the Clean Power 2030 plan was well-intentioned but now “no longer reflects economic reality.”
“The plan was launched during the gas crisis in a low interest rate environment and was right for its time. But circumstances have changed. The UK must prioritize cheaper clean electricity to reduce bills and attract new industries.”
Miliband is already under pressure from energy leaders who argue that renewable energy subsidies and network costs are driving up household bills.
Rachel Fletcher, director of policy and regulation at Octopus Energy, warned last week that green levies and grid expansions could add around £300 to a typical household’s electricity bill by 2030.
Meanwhile, the government insists its reforms will ultimately cut costs and reduce reliance on fossil fuels.
A Department of Energy Security and Net Zero spokesperson said: “Our mission is relentlessly focused on delivering lower bills and tackling the affordability crisis caused by reliance on fossil fuels.”
That’s why we have launched a golden age of new nuclear energy and approved record investments in clean energy to support growth and good jobs.”
Blair’s intervention underlines the political tightrope Labor faces – balancing the need to meet net zero targets while tackling the cost of living crisis.
With the budget due next month and energy costs still among the highest in Europe, advisers warn that Miliband’s clean energy revolution could become a political liability if voters continue to associate green policies with higher bills.
As a senior Labor member privately told Daily Sparkz: “Tony is saying what many of us are thinking: net zero policy is changing rapidly and affordability must come first.”
