The most radical proposal is undoubtedly an “energy furlough scheme”, proposed by the Liberal Democrats, under which the price cap is suspended and the state absorbs the total cost of the next increase. Ed Davey says it will cost £36bn up front, which is obviously a big number for a Government meant to be balancing the books after Covid. But as he points out, that figure is just 10pc of the total pandemic bailout bill. Without policy ideas of their own, the Conservatives will always be on the defensive against such calls for expansion of the state.
Another option is a tougher windfall tax on North Sea oil and gas producers after successive quarters of record profits, or perhaps it will be broadened out, which would explain why it is the electricity producers such as SSE that Zahawi and Kwarteng have demanded to see.
The case for a tax grab on electricity generators is less clear cut but some have clearly benefited from higher gas prices and exceptions could be made for energy generated through renewables or nuclear power to signal investment in them is still welcome.
Or it could be a combination of the two – so that a more punitive windfall tax covers at least a large chunk of any furlough scheme. By closing some of the loopholes under the current levy, it has the potential to bring in as much as £20bn as opposed to £5bn currently, it’s claimed.
The price cap is a total pig’s ear. It is true that without it consumers would be facing even higher bills but it’s no shield against unaffordable bills, and it does nothing to actually help struggling families, nor does it solve any of the structural problems with Britain’s broken energy market. At best it has bought some time, which is being squandered.
The boss of Octopus Energy believes British households need at least an extra £500 to survive the winter, on top of the £400 already promised because that no longer covers the sharp rise in bills. He also claims it could help curb inflation if the money goes in at the wholesale level.
Meanwhile, Derek Likorish, former chair of the Government’s Fuel Advisory Group argues that an effective short-term fix is a social tariff that offers discounted rates for the poorest. He also says a “dramatic” increase in direct support, of between £800 and £1,000 per family, is needed.
Green energy entrepreneur Dale Vince points out that the wholesale price of North Sea gas, which accounts for half of what the UK consumes, could be capped at pre-crisis levels.
At this point the detail is almost secondary, what is needed is real, discernible action. An economic tsunami is hurtling towards us, the consequences of which could be felt for decades.
Read More: Our absentee Cabinet can’t solve the energy crisis with another blast of hot air