New Labour, Energy Policy and Competitive Markets
Posted: 16 Jun 2008
Date Written: November 2007
By the end of New Labour's first term four central objectives of energy policy had become established: cheap energy, the relief of fuel poverty, a major reduction of carbon dioxide emissions, and energy security through maintaining a wide diversity of primary fuel supplies, all to be achieved through competition. After surveying New Labour energy policy documents, the paper argues that New Labour failed to appreciate (i) the extent to which, under such a laissez faire policy regime, these objectives were mutually inconsistent; (ii) that the apparent successes of energy market liberalisation during the preceding Conservative Governments had little to do with competition; and (iii) that the transaction costs of injecting increasing competition into both British and European energy systems are likely to exacerbate the growing threat to energy security. The paper concludes with a brief examination of the implications of transaction cost economics for the organisational structure of the UK energy supply industry.
Keywords: Energy policy, Energy security, Competition, Nuclear power
JEL Classification: L14, L97, L98, Q42, Q48
Suggested Citation: Suggested Citation