Sir Tony Blair has urged Energy Secretary Ed Miliband to ditch his 2030 clean power target and cut green levies as his think tank warns that current climate policies are driving up costs for homes and businesses.
A new report from the Tony Blair Institute (TBI), personally approved by the former prime minister, claims the government’s commitment to fully decarbonise the electricity grid by 2030 is “destroying industry” and “damaging households.”
The intervention, which has sparked fury within the Department for Energy Security and Net Zero, highlights growing divisions inside Labour over the pace and affordability of the party’s green transition.
The report’s authors, led by Ryan Wain, said Labour’s clean power agenda risks pushing voters “towards populists” such as Reform UK ahead of next year’s regional elections, warning that the government’s energy policies “must be recalibrated around affordability.”
“We’re in a cost of living crisis as well as a climate crisis — you can’t just pick one and pretend the other doesn’t exist,” Wain said.
“Right-wing populists are already exploiting this tension. Unless electricity becomes cheaper, the politics of net zero will become toxic.”
Blair, who has made energy reform a personal focus through his institute, backed the report’s call for “cheap, clean power” rather than the current approach, which he said has made the UK “a low-carbon but high-cost economy.”
The TBI report argues that green levies now make up 20% of the average electricity bill, up from just 8.5% in 2015, and that policy costs now exceed the cost of actual electricity for the average household — £334 versus £324.
It also warns that the cost of connecting Britain’s new offshore wind farms to the grid will exceed the cost of the turbines themselves, with the required pylon and substation infrastructure set to cost £112 billion.
The think tank concluded: “The trend in UK energy over recent decades has been the transformation of our electricity sector from a cheap, high-carbon one to an expensive, low-carbon one.”
Miliband, who is overseeing Labour’s flagship Clean Power 2030 policy, reportedly reacted angrily to the publication, instructing civil servants to issue a statement rejecting the findings.
It is the second high-profile clash between Blair and Miliband this year. In April, the former prime minister warned that current net zero plans were “doomed to fail” due to unrealistic timelines and inadequate investment in grid capacity.
Tone Langengen, TBI’s lead energy adviser, said the Clean Power 2030 plan had been well-intentioned but was now “out of step with economic reality.”
“Launched during the gas crisis, in a low-interest environment, the plan was right for its time. But circumstances have changed. The UK needs to prioritise cheaper clean electricity to lower bills and attract new industries.”
Miliband is already under pressure from energy leaders, who argue that renewable subsidies and network costs are driving up household bills.
Rachel Fletcher, Director of Policy and Regulation at Octopus Energy, warned last week that green levies and grid upgrades could add around £300 to the typical household electricity bill by 2030.
Meanwhile, the government insists its reforms will ultimately lower costs and cut reliance on fossil fuels.
A Department for Energy Security and Net Zero spokesperson said: “Our mission is relentlessly focused on delivering lower bills and tackling the affordability crisis driven by fossil fuel dependence.
That’s why we’ve launched a golden age of new nuclear and approved record levels of clean power investment to drive growth and good jobs.”
Blair’s intervention underscores the political tightrope Labour faces — balancing the need to meet net zero targets while addressing the cost-of-living crisis.
With the Budget due next month and energy costs still among the highest in Europe, advisers warn that Miliband’s clean energy revolution could become a political liability if voters continue to associate green policy with higher bills.
As one senior Labour figure privately told Business Matters: “Tony’s saying what a lot of us are thinking — the politics of net zero are changing fast, and affordability has to come first.”
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Tony Blair urges Ed Miliband to scrap green levies amid energy cost backlash
