Douglas Carswell

08 JAN 2016

I asked the Energy Minister why the State is subsiding wind; all I got in response was hot air

When will the State stop subsiding wasteful wind farms with taxpayers' money? That's what I asked the Energy Minister yesterday. It's a reasonable question: British workers give up a huge portion of their wages in tax; the State shouldn't be squandering it. Shame the Government doesn't seem to agree.

If you wanted to make an industry inefficient, you could not devise a better system than State subsidies. British Government subsidies to the banks gave as Too Big to Fail and the 2008 financial crisis. EU agricultural subsidies to farmers produced wine lakes and butter mountains – excess supply no one could consume. US Government subsidies to General Motors and Chrysler resulted in failing companies manufacturing cars people don't want to buy.

Subsidies break the connection between producers and consumers. Normally, a company needs to satisfy the interests of consumers if it wants to make money. A company that makes products people don't want won't sell, and won't succeed against better competitors. That's why under normal circumstances producers have an in-built incentive to keep improving their product.

But a company that receives subsidies from the State doesn't have to satisfy consumers. Instead of making its revenue from selling good products, it can simply collect a cheque from the State. Subsidies allow companies to get away with making bad products knowing the taxpayer will pick up the tab.

State subsidies aren't just bad for the taxpayer. They are bad for the industry they are supposed to support. They take away the incentive to innovate, improve, and deliver good value for money.

Subsidies for renewable energy don't only hurt for British taxpayers and households. They damage renewable technology too. If we want renewables ever to become efficient and useful, we need energy producers to be incentivised to create more efficient technology. Lavishing taxpayers' money on wasteful wind farms serves nobody's interests. It's time to end the renewable racket.

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