The cost of living emergency facing the British people is not an inevitable, unalterable fact of life. We are told so often by government ministers that the pain and anguish the British people are facing is something we have to get used to, and all we can do is tinker round the edges. This energy bill crisis will devastate millions of families and could force more than half of British households into fuel poverty. Unlike the Conservatives, Labour is not willing to stand by and allow that social catastrophe to happen. This is why Labour has proposed to freeze energy prices.
It’s important we understand the deeper lessons this moment teaches us. First, while some of the causes of this cost of living crisis are driven by global factors, its effects – who suffers, who pays and who government protects – are not predetermined. It is a deeply political decision: the Conservatives have opted to let families and businesses pay unsustainably high energy bills while oil and gas companies enjoy huge and unexpected profits.
The second lesson is that affordable energy should be a right for people across our society, and government must ensure that right. Whether a service is provided publicly or privately, there are duties of government that cannot be ducked. David Cameron accused me of “living in a Marxist universe” when I proposed applying a cap to energy bills as Labour leader. He was dead wrong. Markets need rules to prevent exploitation. Governments must be willing to intervene when there is a profound risk to people’s economic security. Beyond this crisis, we need to bring fundamental reform to our failing energy system, which is currently delivering neither affordability nor security for our country.
Third, we must draw the right long-term conclusions about energy policy. This is not, as some would claim, the first net-zero crisis. It is just the latest fossil-fuel crisis. Our job should be to ensure that it is the last. The undeniable truth is that while we remain dependent on fossil fuels, we are vulnerable to the geopolitics of energy. Petrostates, dictators and politicians such as Vladimir Putin are using energy as a weapon of war. Gas prices currently stand at four times the price of the cheapest renewables.
There is only one reliable, sustainable long-term path out of this crisis. That is to get on, now, with the clean energy sprint Labour has been calling for month after month. We should be investing in homegrown onshore wind energy, offshore wind, solar, hydrogen and nuclear energy as well as a national mission to insulate homes.
The fourth lesson goes well beyond energy policy. It’s important to recognise that the energy insecurity millions of people face is a consequence of their financial insecurity and our economic insecurity. We live in a country where 80% of people have savings of less than £500. Twelve years of low growth under the Conservatives have left people, on average, much worse off.
If the growth rates under the last Labour government had been maintained, average wages would be a staggering £7,000 higher by now. That is why Labour’s climate investment pledge is such an important commitment. Our plan to invest £28bn every year over the next decade will help to build new industries and create good jobs at decent wages to deal with the root causes of our economic weakness.
The final lesson is about the battle lines of the next general election. A deep ideological failure runs through the Conservative party. Nowhere is this clearer than in the leadership contest between Rishi Sunak and Liz Truss. As chancellor, Sunak had to be dragged kicking and screaming towards introducing a windfall tax. He only succumbed once the tax included a giant loophole. Meanwhile Truss has looked at this grotesque transfer of wealth from households to oil and gas giants and decided to come out against windfall taxes in principle, decrying them as a “Labour idea”.
These candidates are stuck in the dogma of the past, believing the state must stand back and let market forces run wild, whatever the consequences. They believe we should measure the success and security of our country by the balance sheets of BP and Shell, not the bank balances of the British people.
This is now a central divide in British politics. The Conservatives, lurching from one failed leader to another, who show that they will stand up for the powerful vested interests rather than the British people. And Labour, who have bold policies that put working people first.
Ed Miliband is the Labour MP for Doncaster North and is shadow business, energy and industry secretary