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How smart metering exposes the empty promises of Labour’s energy policy

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Decisions on when to manufacture energy-saving products are often taken on the basis of Government policy. That certainly has now been blown away by the complete U-turn on the installation of smart meters

Spare a thought today for the manufacturers of electricity display devices. After a year of being told by government they must have several millions of their products available, to be installed by ministerial order, there has been a complete policy reversal.

Two Cabinet ministers’ promises, a Labour Party Environmental Pledge, a government White Paper commitment, a positive economic rate-of-return. All have proved to be so much hot air.

So any products sold will now be down to the manufacturers’ own persuasiveness. Because Government no longer wants them.

Adding to knowledge

To my knowledge, there are at least seven companies trading in the UK making such display devices. Those are the little clip-ons which you can attach, and which vividly reveal how much electricity you waste by leaving the iron on when doing something else, or when running the spin-dryer on a sunny day.

Not, I accept, the most important device ever created. But something that adds to a household’s knowledge of just how much electricity they are consuming. All in all, not a bad thing to encourage greater awareness of profligacy.

Which is presumably why in April 2007 Alistair Darling (then DTI secretary, now Chancellor of the Exchequer) announced that from “early 2008”, anybody who wanted one of these devices would be able over the subsequent two years to request one, free, from their electricity supplier. And that all new or replacement connections would automatically include one. He went onto the main TV news to extol his policy.

He was swiftly joined by then environment (now foreign) secretary David Miliband, who thought so much of the idea he included it as one of just five official Labour Party “environmental pledges”.

It was swiftly recognised that from “early 2008” around 3 million of these devices would be required each year, stimulated by the government-backed programme. But could the putative UK manufacturers be sure the policy would go ahead? After all the Big Six electricity companies had immediately gone on the warpath against the government announcement.

The clip-on devices would variously be health hazards, lead to billing disputes, would force retail prices up, would lead to Armageddon (I made this last bit up, but that was the subliminal message).

The manufacturers of the clip-on devices sought reassurance. An unequivocal statement was placed in last summer’s Energy White Paper, saying the give-away scheme would definitely go ahead. It read: “From as soon as possible in 2008 to March 2010, any household requesting a real-time display device for their electricity meter should be given one free of charge by their electricity supplier. We estimate carbon savings from these cost-effective measures of up to 0.3MtC by 2020”.

It also promised that: “From May 2008, every household having an electricity meter replaced, and every newly built domestic policy, will be given a real-time electricity display, free of charge. The display must show real-time information about electricity and cost.”

The environment department DEFRA then included calculations for its likely carbon saving impact in a formal submission to the European Commission. A cost impact assessment concluded it would benefit the UK economy by £500m. What more reassurance was needed?

So the production lines were set up. But “early” 2008 came around. And there was no formal start-date set. The manufacturers started getting fidgety. They knew that it did not require new legislation to mandate each of the electricity companies to make the devices available. Just a simple Statutory Instrument, tabled in Parliament.

Policy would now be dropped

They were told that a definitive statement would be issued next week, then the week after, then “shortly.” Eventually, last month, a brief two paragraph statement was made by the Business Department (BERR). This said that, owing to views received, this policy would now be dropped.

For good measure, BERR added that by no means did it accept the criticisms which the electricity companies had made of these devices. But nonetheless it was going to reverse the previous policy.

Interestingly, the statement was not signed by the other Department involved, DEFRA. Even though it had been their former secretary of state who had made it a formal Labour party Environmental Pledge – and, the last time I looked, the pledge was still on the party’s website.

This is a real cautionary tale for any maker of ecologically-friendly items: never invest on the basis of any proposed new government programmes. No matter how widely promised. Wait until they are up and running. Then start the production lines. And worry why importers are ready well before we are.

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