The rising cost of energy is a national emergency. Last year, British households collectively spent around £30bn on their energy bills. Next year, that bill is expected to be in the region of £170bn. Those sums do not account for the higher energy costs that will be faced elsewhere in the economy, by businesses, hospitals and schools. It would be a colossal economic shock that would cause untold economic hardship and homelessness and people dying of conditions related to being cold.
Last week, Ofgem announced the energy price cap would rise to an average of £3,549 in five weeks’ time. This is almost triple what it was a year ago, leaving people facing average energy bills of £500 a month and more. Experts have predicted this will further increase to £700 a month in January. These kinds of sums will hurt the least affluent the most: low-income families with young children, pensioners living in poverty, people with disabilities. But only a slim minority of households are meaningfully insulated from a financial shock of this order. It is a crisis on the scale of the turmoil of 2008, which required a £137bn up front bailout to prevent banks collapsing and people’s savings evaporating, and of the economic impact of the pandemic, which required £70bn of furlough support to be paid to 11.7 million employees.
