This week Parliament opposed a ban on fracking for shale gas by 326 votes to 230. The vote, and notably nearly 40 Conservative abstentions, marked the last sad act of the Truss administration. She was unable to command unity, even to secure more gas during an energy crisis.

Fracking, although totemic and toxic for some, is just a method for extracting fossil fuels from rocks. It has been conducted safely in the North Sea and onshore in the USA for decades. Used responsibly it might secure supplies of gas that meet our domestic needs for 50-100 years, help our allies against Russia, and raise revenues that can be used to support a low carbon transition.

The alternative to UK fracking is not ecotopia next week, but more imported gas, for at least 20-30 years. We are dependent on the fuel, it accounts for 43 per cent of our primary energy system, we don’t produce enough of it at home to meet our needs, and there are no plausible or affordable alternatives readily available. When we import, we increase net emissions of greenhouse gases, and lose the tax revenue, growth, and jobs we might have extracted from a UK industry.

Most of those opposing it further are the same people who also oppose development of any kind, everywhere, at all times. They are incentivised by an unreformed planning system that rewards obdurate parochialism. To oppose fracking, then, is an anti-environmental, anti-economic stance. The Parliamentary ‘anti-heat coalition’ that sought a ban were not offering an alternative, just politicking, while substantially increasing the risk of shortages next winter – a situation in which more people will die, unable to heat their homes.

The UK is about to become these ‘soggy centrists’ laboratory once more. We will soon see whether they are prepared to compromise with reality by unleashing fracking despite their Net Zero instincts. Or would they rather pay for their virtue signalling through imports and fuel poverty?

Andy Mayer
IEA Chief Operating Officer and Energy Analyst

iN THE MEDIA



Starved for explanation... In his fortnightly column for The Times, IEA Director General Mark Littlewood noted the importance of clearly communicating the benefits of economic growth:

“The public can easily grasp what it means to make improving education your key objective but growth in GDP is a far more nebulous concept.”

Mark went on to highlight the scale of the problem facing free marketers:

“A 2020 study supported by the Office for National Statistics showed how unfamiliar many people were with relatively straightforward economic terms. Fewer than half were able to identify what GDP stood for from a list of options. Even among those who could, few were able to explain that gross domestic product is the total monetary value of goods and services produced in a country in a given time.” 



Pernicious pensions... In an article for The Telegraph, IEA Chairman Neil Record called on the government to revise the costly public sector pensions system by giving workers more choice over pay.

He recommended that every public sector worker be given the option to take pensions contributions in cash and forgo future years’ service in their pension scheme. 

This, Neil noted, would mean the typical teacher could earn £46,600 and decide how they would organise their own pension – just like the 27 million private sector workers who do exactly that. Read here.



Drunk on cheap money... IEA Head of Lifestyle Economics Christopher Snowdon wrote for the Daily Mail on the long-term trends behind the current economic crisis, including years of quantitative easing and rising national debt. Christopher wrote:

“Some people, far from being concerned about our ballooning national debt, took the opportunity to claim that the gargantuan sum proved that successive UK governments had been miserly to borrow so little after the financial crash of 2008, and to inflict ‘austerity’ instead. That was — and is — nonsense."



Turn off the tap... Christopher also appeared on TalkTV to discuss inflation. Christopher dismissed the notion that our inflation has solely been caused by international events and instead pointed to years of low interest rates and quantitative easing. Watch here.



The visible hand... IEA Head of Public Policy Matthew Lesh was quoted in City AM and the Telegraph on the Competition and Markets Authority’s decision to force Meta to sell gif creation website Giphy. Quoted in City AM, Matthew said:

“The potential for acquisition is a key driver of investment into start-ups, driving significant innovation. The CMA’s interventionist approach in the Giphy case risks undermining the digital economy.”

CALLING ALL STUDENTS!



Monetary policy essay price... Applications remain open for the monetary policy essay prize, organised by the IEA, the Institute of International Monetary Policy Research and the Vinson Centre at the University of Buckingham.

This year's question is: Are the central banks to blame for the current inflation episode?

To be in with a chance of winning up to £500, you must submit your answer by 6 January 2023. Further details on how to enter can be found here.



In November, we're also hosting a Teacher Seminar at our Westminster office. The event will include presentations from IEA researchers on issues related to the academic syllabus. The focus will be on the history of economic thought, whether forecasting makes sense, and the history of the government debt crisis.

The event will take place on 2 November 2022 from 10am–3.30pm. You can find more information on how to sign up here.