The Guardian view on Truss’s energy price cap: right policy for the wrong reasons

theguardian.com:

Almost a decade ago, Conservatives thought that Labour’s proposed energy price freeze was part of the “Marxist universe” the party inhabited. Now the prime minister, Liz Truss, finds herself there. Labour and the Tories see eye-to-eye on the need for intervention in energy markets because of a dizzying surge in domestic energy bills. Not since the 1970s have politicians put themselves centre-stage in energy markets.

Freezing the average annual household energy bill at £2,500 from October is a good policy, but it is not good enough to prevent 6.7m homes finding themselves in fuel poverty. The answer would be to increase benefits, but Ms Truss is adverse to “handouts”. That said, her policy leaves bills £1,000 lower than what the regulator predicted. Businesses will get similar-sized help. The package is expected to reduce inflation by up to 5%.

The energy-price guarantee is the right policy for the wrong reasons. Many more households would be immiserated if energy costs were allowed to continue to spiral – threatening to turn recession into depression. The UK’s problem is that it is at the mercy of volatile international gas prices, which also set the cost of electricity. The solution is to use the breathing space afforded by freezing household bills for two years to improve energy efficiency and bring on greener sources of power generation. It also means reopening gas storage facilities that were closed in 2017 under a Tory government to limit the fluctuation of prices.

Instead, Ms Truss announced plans to review its promise to deliver its net zero target and gave the green light to drill for oil and frack for gas. Local opposition and the lack of viable shale deposits means Ms Truss’s claim that gas could be flowing in six