Labour’s ideological approach to Britain’s electricity market risks raising prices for millions of households, a damning new report warns. With demand expected to soar by a third over the next decade, the study says politically motivated subsidies will damage our ability to meet future electricity needs at low costs.

The Centre for Policy Studies report also takes aim at Ed Miliband’s flagship plans for Clean Power 2030 and Great British Energy.

Author Dillon Smith said, “Ed Miliband has been promising his 2030 targets will lower household energy bills, but nothing the Government has done after 18 months in office will deliver that.”

He added that Labour are “doubling down on the regime of subsidies and central planning” that has left us with energy prices 90% higher than the European average.

Claire Coutinho, Shadow Energy Secretary, said: “This interesting report from the CPS makes a powerful argument to return to market principles in our energy system.

“Our energy policy comprises a complicated web of taxes, subsidies and regulations which have driven up the cost of energy in Britain. We need a system that favours competition, drives the best prices for consumers and prioritises cheap, reliable energy.”

A Department for Energy Security & Net Zero spokesperson said: “Our clean power mission is the only way to bring down bills for good.

“The alternatives leave Britain dependent on petrostates and dictators whose control of fossil fuel markets helped drive the cost of living crisis, and are not in the interest of the British people.

“Wind power has already cut wholesale prices by up to a quarter – and new projects will help to push them down even further.”

It comes as Mr Miliband’s Net Zero policies were blamed for a sharp downturn in Aberdeen, where the average home now sells for just £136,000, its lowest level since 2006, and around 18,000 energy jobs have disappeared since 2010.

Once Britain’s gateway to North Sea wealth, with wages second only to London and property prices nearing £215,000, the city is now grappling with the fallout of a rapidly shrinking offshore sector.

Between 2004 and 2015, Aberdeen’s population increased by almost 20,000 as workers relocated to secure highly paid roles in the energy sector, while property values surged 165% over the preceding decade.

By contrast, more than two-thirds of homes in Aberdeen declined in value last year, according to Zoopla data.

Some homeowners who bought at the market peak in 2014 have seen losses of more than £90,000.

Industry analysts attribute part of the downturn to the Government’s decision to halt new drilling licences and to extend the windfall tax on oil and gas producers until 2030.

The levy was originally introduced as a temporary response to elevated profits during the pandemic recovery period, but was extended in the November Budget delivered by Chancellor Rachel Reeves.

Professor Paul de Leeuw, director at the Energy Transition Institute, said the pace of decline in the North Sea is now being shaped by “policy, not geology”.

He said: “We have a choice now of managed decline which is what happened in the last quarter century or an accelerated decline where you pull the handbrake.

“If you go for accelerated decline, then it’s a real problem, and that’s what we’re currently seeing.”

Trade body Offshore Energies UK has warned that prolonging the windfall levy risks undermining investment and could result in tens of thousands of job losses across the supply chain.

Ross, an instrument technician working in the oil and gas sector, recently sold his home for £40,000 less than the £245,000 he paid in 2019.

He said: “I was worried that if I didn’t sell now the price might drop even more. If it dropped more I would very likely end up in negative equity.”

He blamed Government policy for the downturn: “The housing market in Aberdeen effectively crashed because of the quite frankly ridiculous net zero policies which have played a huge part in all this.

“Unless we see a massive shift in net zero, windfall tax and offshore licences, Aberdeen will continue to remain as it is.”

Across the wider UK, property prices have risen by more than 53% since 2014, creating a stark contrast with conditions in Aberdeen and leaving some homeowners facing diminished retirement prospects.

Energy Secretary Ed Miliband previously pledged that clean energy roles would replace oil and gas positions as part of the transition to net zero.

However, several major companies operating in the region have reduced their presence or redirected investment overseas, including to energy projects in the Persian Gulf, with some skilled workers relocating as a result.

Professor de Leeuw said renewable investment has not expanded quickly enough to absorb those leaving traditional roles.

He said: “Renewable energy activity isn’t happening fast enough. [Those working in the energy sector] are highly qualified, highly skilled people. They’re not going to sit around inside of a Jobcentre Plus.”

Net migration to Aberdeen has fallen sharply, dropping from 24.2 per thousand residents in 2023 to 11.7 last year, reducing demand for housing and adding further downward pressure on prices.

As more properties come onto the market amid subdued buyer demand, values have continued to weaken.

A spokesman for the Department for Energy Security and net zero told GB News: “We have set out a plan to build a prosperous and sustainable future for the North Sea, backed by record investment to grow clean energy industries.”