Breakthrough?

Yesterday the 1922 (Conservative) BEIS Backbench Committee published a remarkable recommendation in their report Energy Market Reform: tackling the energy trilemma. It is to pay up to 100% of domestic household energy bills to those most affected by new renewables or fracking projects near them. Three miles is mentioned.

Former Energy Minister Andrea Leadsom’s committee, with this initiative opens a door of great consequence. It is to pay compensation to households to incentivise them not to object to new energy projects near them, (provided the project is first supported in a local referendum). Can this principle be applied to new housing projects too, to motivate local residents to support new housing near them? It could help unglue the housing deficit logjam. But questions will arise. From whom would the money come? How would the amount be calculated? Would it be paid annually for the duration of the project as Leadsom proposes which makes little sense if applied to housing.

Sourcing the money is key. Developers is an obvious option. A long lead time will be needed to avoid market disruption, win cross party support and remove just fears of landowners. Who are the financial losers? It is existing households who can show the value of their home will reduce if new homes are built near them. Reducing their rates by up to 100% will have local appeal and will provide a big monetary incentive. Should the other local ratepayers carry the additional burden to stop councils losing vital rates income?

If not, an alternative approach is to export the necessary housing to a neighbouring council area where the local residents nearby who will be most affected receive the rates reduction incentive and their council is reimbursed by the exporting council. This push/pull mechanism might, uniquely introduce competition from local areas and their residents to be one the host locations. Such an unheard off thought process seems inconceivable, but it matches market and voter reality.

So it is bewildering to see opposition voiced by Richard Black of the Energy and Climate Intelligence Unit, the non-profit, well regarded and connected organisation muddling the fact that because the majority of people in a range of countries do not oppose nearby wind farms this is also true in England. Based on my own experience I prefer the views of Conservative MP’s in rural areas and the evidence of energy giant Octopus that households in the north of England are willing to live near a wind farm in return for cheaper power.

It may be time to look at the liability to pay rates faced by every household, and discover the potential to use this obligation to obtain local support for new homes.

Ian Campbell

10 January 2023