The Prime Minister must not forget the energy crisis raging in homes
As the Energy Price Cap - and bills for households - rises the pressure is on household budgets as much as it is fiscal ones
While diplomacy takes centre stage this week, the cost-of-living crisis at home continues to deepen.
This morning, the country awoke to yet another energy bills hike. Regulator Ofgem announced that prices for a typical household will rise by more than £100 a year in April, with an increase of 6.4 per cent, even higher than expected. A household using a standard amount of gas and electricity will now pay around £1,849 annually.
Bills remain about 50 per cent higher than pre-Covid levels, despite falling from their 2022 peak when Russia’s invasion of Ukraine sent energy prices spiralling. For millions, however, they are still unmanageable.
This crisis is a wake-up call for both voters and government.
Sam Alvis, associate director for IPPR, puts it plainly: “The public is clear—they want to end this costly reliance and shift to homegrown, secure, and low-cost renewables.
"The transition to renewables will mean lower, more stable prices, freeing us from the mood swings of the gas market. But people need to see that the government is on their side now.
"Immediate action on household costs can help sustain public support for the rapid expansion of clean energy. The government should consider rebalancing costs between bills and taxation and review how Ofgem calculates charges.”
Labour understands this. Their push for home-grown renewable energy is not just about the climate—it’s about economic security. With geopolitical instability on the rise and the US offering little certainty as a reliable ally, the case for a sovereign, affordable energy supply is stronger than ever. If Labour wants to leave voters feeling better off by the next election, their green investment plans must move at pace.
To Energy Secretary Ed Miliband’s credit, his department is pushing ahead as fast as it can despite mounting resistance. But with the green transition comes inevitable backlash. Reform UK and right-wing lobbyists argue that abandoning net-zero pledges in favour of fossil fuels would lower costs for consumers.
Even within Labour’s own ranks, tensions are simmering. Chancellor Rachel Reeves is grappling with the challenge of reconciling her drive for economic growth with Miliband’s green agenda, while unions voice concerns over the impact on jobs. The government’s hesitancy only worsens the situation.
As the Tony Blair Institute warned in a report last week, indecision creates the worst of all worlds: a weak energy strategy and an even weaker economy.
“The United Kingdom needs a hard-headed, not hard-hatted, industrial strategy that prioritises industries with genuine potential to create future prosperity. For decades, it has lacked one – swinging between laissez-faire inaction and politically motivated, poorly targeted interventions. The focus on short-term, photogenic projects over long-term economic merit has left the country ill-prepared to compete globally. Without a decisive break from the past, the government risks simply managing decline – using scarce resources to prop up fading industries while failing to cultivate strengths in the high-growth sectors of the future.”
The government must be honest with the public: While it’s true that decarbonisation requires upfront investment, the long-term payoffs are undeniable: reduced reliance on volatile global gas markets, more local jobs, and a cleaner, greener future for the next generation.
Still, Labour cannot afford to overlook the immediate financial strain many voters are under. Research published today by the Joseph Rowntree Foundation reveals that economic insecurity is the primary reason voters are drifting away from the party. A study by leading political scientists found that of those who backed Labour last year but have since switched, 46 per cent are economically insecure—far more than those citing migration or crime as their main concern.
Last week, I argued that Labour must abandon its self-imposed fiscal restraints and announce a bold package of investment in infrastructure and public services. Such a plan would create jobs, improve local services, and kickstart economic growth—churning through NHS waiting lists, getting people back to work, and reviving struggling communities. Crucially, the cost does not need to be passed on to those already struggling.
Instead, Labour should target those with the broadest shoulders: multinational corporations like Amazon, outdated council tax bands, and capital gains loopholes. And with defence spending becoming a growing bipartisan concern amid global volatility, the case for a one-off wealth tax has never been stronger.
Voters will not forgive a government that cowers to the wealthy while ordinary citizens struggle. But Labour must resist the lure of easy, populist solutions from the right—such as abandoning the green transition in a misguided bid to cut bills in the short term. Instead, they must make a bold case for long-term prosperity and ensure that those who can afford to contribute do so.
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