In January the French authorities pressured state-owned vitality supplier EDF to cap worth rises at 4% for a 12 months – may the identical be achieved within the UK and does it imply the French are higher off?
The measure has value €8.4bn (£7bn) and can defend nearly all of households from the enormous vitality payments hikes seen right here within the UK.
Business presenter Ian King was requested about this in a Q&A in our value of dwelling weblog – and has some solutions about the way it’s been achieved and whether or not it might work within the UK…
Isn’t Europe extra reliant on Russian gasoline? How can vitality be cheaper in France?
They are, in lots of circumstances.
The typical German or Italian family, for instance, is at present paying extra for his or her vitality than the standard UK family. It can be price making an allowance for that vitality tariffs within the UK are historically decrease than in continental Europe – it’s simply that UK households are inclined to devour extra vitality because of the UK’s older, draughtier housing inventory.
France is one thing of an outlier as a result of the overwhelming majority of its vitality comes from nuclear – so it’s much less uncovered to larger gasoline, oil or coal costs.
Are French households actually paying much less?
France’s nuclear fleet can be ageing and half of it’s offline at current – so France might in time find yourself paying extra because it seeks different vitality sources. France can be an outlier as a result of President Emmanuel Macron has frozen vitality costs. But that’s going to return at an enormous value to the French state. He has simply spent €12bn alone on shopping for the remaining 16% of EDF, the nation’s principal electrical energy supplier, that the federal government didn’t already personal. He did this as a result of this worth freeze goes to be ruinously costly for EDF. The value of this assist might solely turn out to be clear over time.
Is nationalisation the reply?
France, as I say, is an outlier in that it’s nationalising EDF, its principal electrical energy supplier, however that’s primarily as a result of that firm (which has at all times been state-controlled) is a debt-laden basket case going through huge capital expenditure within the coming years as a result of Mr Macron needs an enormous roll-out of latest nuclear energy crops.
That form of expenditure can solely be back-stopped by French taxpayers. And observe that France is just not taking the identical method with its gasoline suppliers. Nor are comparable economies like Germany.
Could the UK cap costs at 4%?
We may – however the fee to the taxpayer (as it is going to be in France) could be immense. And why would you need to subsidise these households that may afford to pay extra relatively than try to goal assist at these in most want?
Source: information.sky.com”