All Brits should get an “essential energy guarantee” claims economics think tank

A new report warns energy bills could jump by £288 in July and calls on the government to act now to protect households, rein in inflation and break our dangerous dependence on foreign gas

Remember when the Prime Minister promised to cut your energy bills by £300 a year? Well, forget that. Thanks to the chaos in global oil and gas markets, your bills could jump by £288 come July. That’s not a cut. That’s a slap in the face.

A new report from the New Economics Foundation warns that this energy shock could be even worse than the crisis we lived through in 2022. And this time, our economy is in a much weaker position to deal with it. At worst, we’re looking at soaring inflation, falling demand and even recession.

So how did we get here? Because the UK is still hooked on imported gas. Every time there’s a conflict overseas, we pay the price. Ordinary families and small businesses are left picking up the tab.

The report lays out what the government needs to do right now. And honestly, none of it is rocket science.

Give every household a fair deal on energy

The centrepiece proposal is simple: guarantee every home a basic amount of cheap energy to cover the essentials. Heating water, keeping two rooms warm, running a fridge and a washing machine. That’s not luxury. That’s survival. The Foundation calls this an “essential energy guarantee”.

The clever part? It’s funded by taxing the very companies profiting from this crisis. The report estimates the policy would cost £4.5 billion, which sits comfortably within the projected £5.6 billion in tax revenues from UK oil and gas production. In other words, make the polluters pay.

This isn’t some radical experiment either. Countries like Japan, South Korea and India already do this. After the 2022 crisis, Austria, Greece, Poland and the Netherlands all introduced similar protections. We’re actually behind the curve.

On top of that, the report calls for removing all policy costs from energy bills and shifting them to taxation. That alone would knock £106 off your annual bill and stop the poorest households from paying a disproportionate share.

Stop the Bank of England from making things worse

Here’s something that should make your blood boil. Last time energy prices spiked, the Bank of England hiked interest rates. The report is blunt: it did little to help consumers or the wider economy. That’s because the inflation wasn’t caused by people spending too much. It was caused by global energy prices.

The report warns we cannot repeat this mistake. Hiking rates now would only take more money out of the economy at a time when consumers and businesses already have less to spend and invest because energy bills are eating up more of their outgoings.

Break free from gas for good

Some politicians will tell you the answer is more drilling in the North Sea. Don’t fall for it. The report is clear: there’s little gas left to extract, and even if there were, it wouldn’t lower your bills because gas continues to set the price for the entire UK energy market based on global prices. More drilling won’t help lower energy costs.

The real answer is clean energy. Solar panels, batteries, homegrown power that no foreign conflict can touch. The government needs to speed up the rollout of renewables and use public finance institutions like the National Wealth Fund to drive down costs, not lock us into decades of expensive gas.

The bottom line

This crisis didn’t come from nowhere. We’ve been left dangerously dependent on foreign gas while the one thing that is actually protecting us right now, renewables, still isn’t being rolled out fast enough.

The solutions exist. Protect people’s essential energy. Stop repeating the same monetary policy mistakes. And build a clean energy system that actually works for us, not for the polluters.

The only question is whether the government has the nerve to act.