Britain faces a national crisis because of soaring energy costs – but making gas cheaper is not the answer

Editorial: The understandable focus on household bills and business costs cannot distract the country from the even bigger climate crisis

‘Energy costs at a global level have been too low for too long’ (PA Archive)

According to Energy UK, a trade body, Britain faces a “national crisis” because of soaring energy costs. A combination of poor policy decisions and bad luck has conspired to make much of the domestic energy supply industry unprofitable, with wholesale energy costs now far exceeding the statutory energy price cap, which was set in easier times.

EDF, one of the biggest players, suggests that the annual cap could reach £2,000 by October next year – from £1,277 now. By its nature, because gas bills take no account of income and ability to pay, the hikes in the cost of gas and electricity generally – and no doubt fuel oil, petrol and diesel, in due course – will hit the poorest families hardest. Fuel poverty will rise.

For now, the effects of the surge in costs at the wholesale end are delayed, because the next domestic price review isn’t due to be implemented until 1 April – but when it is, households will be hammered with a rise in bills of 45 to 50 per cent.