The Energy Price Rise Silence

As promised, Ofgem raised the energy price cap again. From the start of October gas and electricity will have standing daily charges of 28p and 46p respectively. This is up from 3.6p and 14p before prices started galloping away. Per kilowatt hour, that will be 15p and 52p. The average household bill's increasing from £1,971 to £3,549. This is nothing less than a catastrophe. People are going to die while millions face destitution, and tens of thousands of small and medium-sized businesses are going to close. Public bodies also face a cash flow crisis and without injections of funds will cut jobs to keep afloat, exacerbating unemployment at the worst possible time. Yet on this miserable day we hear nothing from the government.

That's not strictly speaking true. The soon-to-be-ex-chancellor Nadhim Zahawi did the TV rounds this morning telling Britons to conserve energy. In 21st century Britain, wearing woolly jumpers is the official advice to ward against the winter cold. Of our holidaying Prime Minister, we're told that the country should simply lump it. Don't the ingrates of these islands realise the Ukrainians have it so much worse?

And Liz Truss, who is certain to be the next Prime Minister, simply regurgitated everything she's already said on the Tory hustings trail. In a statement put out on Friday morning, the campaign team says,

As prime minister, Liz would ensure people get the support needed to get through these tough times. She will immediately take action to put more money back in people's pockets by cutting taxes and suspending green energy tariffs. This is on top of ongoing work such as the Energy Bills Support Scheme, which will see a £400 discount paid to consumers from October, and the £1,200 package of support for the most vulnerable. Liz will work flat-out to deliver long-term energy affordability and security, unleashing more energy by maximising our North Sea oil and gas production - helping keep bills down in the future.

The statement also said she would not be available for interview at all.

There you have it then. Not so much a case of the Tories being asleep at the wheel while a crisis builds, but one of wilful negligence. If one wanted to chance an uncharitable reading, an argument could be made that this serve some political purposes. With the government about to crash into a huge wall of opposition, letting the crisis anxieties run amok might sap the confidence necessary for collective action. The spectre of mass unemployment is never a friend of rising militancy. For while Tory ineptitude is legion, the one area they've shown a great deal of skill - particularly during the acute phase of the pandemic - is in governance.

But the explanation for saying nothing has a more mundane explanation: the Tories don't know what to do. They are aware the incoming government has to move fast, otherwise the entirety of Truss's time in office will carry the miasma of failure to the next election. But the risks, as they see it, is do too much and their imagined mass audience for Thatcherism would recoil at the "socialism" of their party. It can also raise the horizon of doing things differently, which absolutely must not happen; the Tories have spent the last year wiping away the legacies of Covid and Corbynism. Do too little and the country risks becoming ungovernable. If the mass non-payment of bills takes off, the Tories will be lucky if this is all they have to face off against. According to Alex Wickham's Bloomberg piece, some in the Truss camp want to limit support to the most vulnerable and, of course, pensioners. Others more wise to the politics of the moment would like to see something of the order of the job retention scheme, acutely aware Labour's price freeze has raised the appetite for universal help.

One such scheme that has already been presented to Kwasi Kwarteng, heir presumptive to Number 11, has come from the energy companies themselves. The suggestion is the companies freeze the bills in exchange for a £100bn Treasury loan. This would then be paid back over time by, you guessed it, adding levies to energy bills. The gossip merchants don't say what Kwarteng thinks, but it is a very Tory-sounding scheme. In the end, we still end up paying for the crisis. But the sum involved is enough to make Conservative blood run cold. If this is funded by quantitative easing, the worry is what this would do to inflation. And if it's done through government borrowing, how much does that add to interest payments on state debt? And, politically, it shows that the state can do things - which is the very opposite of where Truss and her baggage wagon want to be.

This is a crisis of the Tories' making. They can blame Putin as much as they like. They're the ones who've gutted the country's gas storage capacity, they are the ones who've cut down on domestic generation because buying from abroad was the easier option, and it is they who constantly claw back public funding for renewables, making sure the UK's dependence on fossil fuels lasts that much longer - with Truss's promised scrapping of the green levy another example of their criminal short-termism. But the nature of the crisis is such that they're quaffing in the last chance saloon. If Truss doesn't come up with something universal, it's not that the Tories just face losing the next election - their long-time decline, temporarily slowed by Brexit and the 2019 election, might accelerate. The cost of living crisis is existential for the Tories too, and it could mark their end as the natural party of government. They can't escape the high stakes either.