The Observer view on Rishi Sunak and rising energy bills

theguardian.com:

Four-fifths of British homes are heated by gas and almost half of our electricity is produced by burning gas. British energy policy, in thrall to the notion that the market never makes mistakes and governments always do, has left us uniquely exposed to the more than doubling in gas prices first driven by Covid and now by the war in Ukraine.

British households spent £36bn on gas consumption in 2021-22, according to energy consultants Aurora Energy Research. They project this will rise to £74bn in the next financial year 2022-23 – a rise of £38bn.

Put another way, the average household will have paid £1,277 a year to this April for its gas, when the price cap will be lifted, and then more than £3,000 in October. These are unparalleled swingeing increases.

Of course the government should have insisted on more diversified sources of supply, intensified the transition to renewables and accelerated rather than turned back the improved insulation of our homes. The country is paying a huge price for the government’s blind faith in the wisdom of markets. The question is what to do now.

However, the chancellor, Rishi Sunak, has signalled that he intends to do nothing in the spring statement on 23 March. Instead, he will stand by the measures he has already put in place – a £200 discount in every household’s energy bill earmarked for October this year that will be recovered in annual £40 instalments over the next five years, along with a non-repayable £150 rebate in council tax payments for homes in bands A to D.

In the context of energy bills that are expected to rise by approaching £2,000 in six months, this is nugatory, mean in its thinking and self-defeating in practice.

It is part and parcel with Sunak’s wider approach. In the next