York Press column: Why the energy supply crisis needs to be Liz Truss’ number one priority
September 7, 2022
After a summer of hustings and electioneering, we have a new leader of the Conservative Party and a new Prime Minister. I want to offer Liz Truss my congratulations on her success, and I will give her my full backing in Parliament as she begins to unveil her legislative agenda.
While it was not meant to be, I am proud of the hard-fought campaign Rishi Sunak ran travelling the length and breadth of the country promoting his positive vision for the United Kingdom. He remains an asset in Parliament as an excellent MP and a great advocate for Yorkshire.
Now the vote has concluded though, I urge my Conservative colleagues to come back together so we can tackle the challenges facing our constituents and deliver the support they need. The biggest priority facing our new Prime Minister will be how she addresses the energy supply crisis. All of the increased costs facing consumers can be linked to rising energy prices so by tackling the issue head on, she will offer relief is many areas of the family budget.
While these pressures have been looming for some time, they have undoubtedly been supercharged by Russia’s invasion of Ukraine. Fortunately, the United Kingdom is not heavily reliant on Russian gas for domestic use but with Western Europe trying to ween off their dependency the remaining markets have seen a spike in demand driving prices to record highs.
As projections for the price cap could see families facing annual bills of over five thousand pounds by next year and businesses overheads increasing ten-fold, it is clear more has to be done. I am particularly concerned about the impact on businesses given they have only just weathered the economic storm of the pandemic and they do not even have the limited protection of an increased price cap.
There is no silver bullet solution that will work for all businesses and families, but every avenue of support should be considered with nothing left off the table. At the time of writing, political journalists believe that the favoured option by Government is to set their own domestic price cap essentially undercutting Ofgem but I stress again that similar bold measures must be enacted to support businesses.
Other economists have advocated for raising the income tax and national insurance tax thresholds while temporarily cutting VAT to allow families to keep more of what they earn and to encourage them to continue spending to protect business income streams.
In the short-term, we may also need to accept that the road to Net Zero involves frontloading our fossil fuel use over the next decade while we develop new technologies.
On a more positive note, I still believe in the long term the United Kingdom already has policies in place to secure our domestic energy security and protect consumers from future spikes in energy prices. It is clear we need to develop future energy policy around three objectives: environmental sustainability, affordability and availability.
Although set-back by ten years due to the Liberal Democrats blackballing plans in the Coalition Government, funding has now been confirmed for a new nuclear power station. We only have to look at France to see how their nuclear energy network has partially shielded them from rising prices when compared to other European countries.
We are not only investing in existing fuel sources though and are continually funding research into the energy sources of tomorrow. Last year, the Government unveiled its plan to work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030 – which is equivalent to the natural gas used in powering around 3 million UK homes each year. A suburb in Teesside is set to be a case study for domestic hydrogen use and if successful this will revolutionise our domestic fuel market.
Undoubtedly, Liz Truss is becoming Prime Minister at a time when our country faces looming crises but I am confident, if she draws from broad-base of talent within our Party regardless of MPs’ preferences during the leadership election, she will have an incredibly capable Cabinet that will deliver for the country, for York and for local residents.
