I’m sorry, but I have to bore you all about Net Zero again. But then this isn’t strictly about Net Zero. It’s about the whole economy, Brexit and the total inadequacy of this government.

Industry groups have issued a warning to government that it is potentially sleepwalking into disaster with soaring gas prices putting factories at risk of being shut down. The Chemical Industries Association (CIA) this week said that rising energy costs, which saw gas prices grow by a whopping 500 percent for their members from January 2021 to January 2022, meant companies would be forced to decide whether to continue running their UK factories at all.

While soaring gas prices are a major contributor to a cost of living crisis for households, they have also created what industry groups describe as a cost of working crisis, in which it is now far more expensive for gas-reliant factories to operate and could soon become too costly. But even if factories are not brought to a standstill, there is concern that the high costs of operating in the UK will make energy-reliant industries in this country increasingly uncompetitive compared with European counterparts, which currently pay less for carbon.

Britain’s Emissions Trading System (ETS) Authority again decided in January that it will not intervene in the country’s carbon market, even though prices were high enough to trigger a so-called cost containment mechanism (CCM).

British businesses are paying substantially more to produce carbon dioxide than their EU rivals because of the government’s refusal to link the UK carbon market to the bigger European market after Brexit. The difference is putting UK industry at a significant competitive disadvantage to European rivals, at a time of soaring energy prices, but does not result in any additional benefit to the environment.

UK companies are paying more than £75 (€90) a tonne for the carbon they emit, while similar industries in the EU are paying up to about €85 a tonne. Britain’s carbon price is higher because the UK carbon market, set up last year with the first permit auctions taking place last May, is much smaller and lacks the liquidity of the larger EU emissions trading scheme (EU ETS) that has been operating since 2005 and covers all of the EU’s heavy industries.

Under both schemes, companies buy tradeable permits to cover the carbon dioxide they produce, with cleaner companies able to sell spares to laggards. The price acts as an incentive to companies to clean up their operations, and is seen by some as an economically efficient way to help meet the net zero emissions target.

The risk of factories being closed down first surfaced in October, when Business Secretary Kwasi Kwarteng handed Rishi Sunak, the Chancellor of the Exchequer, a series of proposals designed to protect energy-intensive industries (EEIs) from rising prices. Government sources at the time said there was a risk of gas becoming too costly for sectors like chemicals, paper, and ceramics to continue with production in the UK — an outcome that would not only spell more disruption for supply chains, but also likely result in significant job losses.

The Treasury and the Department for Business, Energy and Industrial Strategy (BEIS) are yet to put those proposals into action, however, to the frustration of affected groups. This scheme, though, amounts to a corporate welfare scheme to cope with a wholly artificial cost – a cost which already adds a third to the cost of gas. Since we have left the single market, thereby reclaiming our regulatory sovereignty to the fullest, we really ought to do away with this punitive tax.

Unfortunately though, the UK agreed in the TCA that “both parties will have their own effective systems of carbon pricing in place to help fulfil our respective climate goals”. That said, there is nothing especially preventing us from suspending the system at least temporarily in light of the global pandemic. We won’t do that that though. The Tories are wedded to Net Zero and there’s too much big money involved in carbon trading. All the same, it must be made known that it is within the power of the British state to substantially reduce the cost of energy at the stroke of a pen.

From whichever angle you examine the energy crisis, it’s clear that the system is choked with taxes, regulation and make-work schemes, the costs of which are greater than the annual fuel used by gas power stations. This crisis is wholly self inflicted, and both the UK and EU could very well see their energy intensive industries moving to countries where there are few emissions controls and little enforcement of pollution rules.

As we have noted on many occasions lately, this government is squandering the opportunities afforded by Brexit by way of doing things broadly the same way as before, subjecting us to a major drop in living standards because it doesn’t have the guts or the imagination to do anything else. We’ve lost the trade that goes with the Single Market but we’re doing nothing with our new freedoms to make UK PLC more competitive.

If ever there were a time for a radical rethink of energy and tax policy it is now. There is both the need and the opportunity, yet the Tories remain steadfastly committed to keeping everything the same, even if it leads to the loss of countless high value jobs – all in the name of an agenda for which there is no mandate.

Moreover, the move to Net Zero is likely to make things much worse. Take the push for heat pumps. Peak home heat demand is several times larger than the current electricity grid capacity of the UK. The electrification of heating shifts gas demand to the grid in the coldest spells, often when wind isn’t blowing. Heat pump advocates need to tell us what happens when our smart meters up the tariff to shave peaks at minus six degrees when there’s no wind and we’re buying energy gas off the spot market to keep the CCGT plant running. How much will we save then? However much they obfuscate, we know what it means. It means that poorer households will have to switch off their heating. That’s the reality of NetZero.

For Britain and Europe, the future is looking colder, darker and poorer. Worse still, it’s starting to look like our votes are completely meaningless. We voted to break with the dead hand of top down technocracy, but that’s what we’re getting anyway – as though we never left the EU. This has dangerous ramifications for our democracy – and Johnson is playing a dangerous game by ignoring the message of 2016.