State intervention will not solve the energy crisis
Andy Mayer comments for The Telegraph
Annabel Denham writes for The Spectator
Andy Mayer and Julian Jessop comment for City AM
He argues that spikes in energy prices are “rooted in the government’s interventions in the energy market”.
“More intervention is not a solution and will make these problems worse. This policy is a mask, when what the market needs is a vaccine.”
“Addressing neither error, while introducing a hidden price cap, will further damage competition and ensure that taxpayers are exposed to higher costs for longer. The main winners will be financiers supporting wholesale hedging contracts, not the public.”
Julian Jessop, IEA Economics Fellow, also commented on the proposed measure.
“market incentives can only work properly if risks are shared by consumers and suppliers”
“The proposed mechanism is described as ‘temporary’ and ‘self-funding’, but it cannot really be both. For the taxpayer to get their money back, the scheme would need to be in place for a long time. And during this time, suppliers would have to pass any savings from lower wholesale costs to the taxpayer rather than to customers.”
Read the full article here.