According to Houchen’s calculations, suspending consumer green levies – which encourage energy efficiency measures – for a year would cost the Treasury more than £12bn. Crucially, however, this would be a deferral rather than a holiday, with the costs recouped through the green levy regime being extended by a year.
The Tees Valley mayor, who was born and raised locally, is at the coalface when it comes to seeing the impact of the cost of living crisis on working class families. His fear is that short-term aid will not be forthcoming because Whitehall is not in touch enough to know what life is like beyond the M25.
“I think a lot of people in Westminster, while some talk about it, a lot of them don’t fundamentally get the impact that people are going to feel,” he explains.
“There are too many economic purists in the civil service. And the [opposition to] intervention in which the Government can play a serious role in energy security is all predicated on a pure economics view of how you run an economy.
“We all know the world is not a level playing field. The French are subsidising their power. The Russians are using gas as a geopolitical tool, and you’ve got the North Americans using frack gas.
“If we are writing academic papers, then yes, you are correct. But the world is not playing by the same rules.
“The economic purists and the Treasury would say: ‘We don’t need to generate any of our own energy, we’ll just buy cheap energy from France.’ Well, you know what, when geopolitics and other drivers come in, that’s a pretty poor policy.”
Houchen’s thinking is a brand of economic policy not to everyone’s taste. At its heart is spending comparatively modest amounts of public money as a catalyst to attract private capital.
He is evidently irked by being labelled an “interventionist Tory”, arguing “[it] fundamentally isn’t true”.
“You get the regulation right, it shouldn’t, in theory, cost the Government very much,” he says.
“Is it spending, is it low spending? Is it Number 10 against Number 11? Actually, to some extent, both are right and both are wrong. We need a smarter Government.
“That’s what we do in Teesside quite a lot. But it gets misinterpreted as either interventionist, or anti-low tax type of stuff.”
