Ed Miliband is in a panic. He and his green friends have been telling us for years that the advent of windfarms will bring plenty of well paid new jobs. Now, however, he tells us he is angry that workers in his offshore wind industry are being exploited. I assume he means some, not all, though he does not limit his criticism.
He tells us, in a speech, that “they are in no man’s land when it comes to employment protection. Not even guaranteed the minimum wage”. He plans to put into law that all offshore workers will have a “Fair Work Charter” that offers “fair wages, the very best rights at work and access to unions”. Future wind projects will require meeting these standards as a condition for the extensive subsidies and guaranteed prices these projects attract.
I am all in favour of good terms and conditions. I want people to be better paid. But better pay has to come from working smarter, and from selling services and products at prices customers can afford in order to pay the wages.
This is where Mr Miliband will hit yet more problems. Renewable electricity from offshore wind is already very expensive, with a guaranteed price for the latest projects way higher than the equivalent price of energy from gas, and higher than electricity generated from gas. We now hear this could be because some of the contractors are treating their employees badly. Overcharging customers and underpaying employees is a lethal combination which it is not easy to break out from.
His move to pay them more will be welcome for the employees, if they can still get a job, but will mean more cost pressures upwards on our electricity bills.
Mr Miliband only skirted round the issue of why our electricity is so dear. He recognised that lower income families are struggling. His answer is to step up the Warm Homes subsidies, giving them to a larger number of people. He is recognising in practice that his manic drive for more renewables has not brought the price of power down. There was no mention of his election promise of £300 off the average bill for everyone, as presumably he now realises this is unachievable. So far on his watch we have added more renewables to the system. whilst the price of electricity has climbed further up.
Mr Miliband claims our electricity is costly because of the price of gas. This is not the case. Retail electricity prices in the UK are nearly four times more expensive than gas per unit of energy. Power generated from gas is often cheaper than the recent high guaranteed prices offered for some renewables. The costs are tilted to help the renewables anyway as they do not have to pick up the bill for supplying power when the wind drops. The cost of doing that falls to gas, which of course has to charge more for only running occasionally. It would charge a lot less per unit if it were allowed to run all the time, spreading the capital and maintenance costs over more output.
The worst failing of all for a Labour minister is that both the GMB and Unite, two of our largest Unions, are very critical of his energy policy. It prices us out of many industrial markets, leading to factory closures and lost jobs, and seeks to close down our once successful oil and gas industry too quickly. This means we end up as a country which imports so much that we lose jobs and tax revenue.
