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Andrew Pendleton, Deputy CEO and Director of Strategy and Advocacy

Dear Prime Minister.

Welcome to your new job at this most difficult of times. You need to act fast.

UK households are facing a huge hike in energy prices next month. The now-announced Ofgem energy price cap increase, which comes into force in October, adds more than £1,500 to an average household dual-fuel energy bill. This comes on top of and feeds back into price increases across the whole economy.

The triggers may have been the disruption to global markets during the pandemic and Putin’s brutal invasion of Ukraine, but the shift in geopolitics and unravelling of liberal economic globalisation will almost certainly usher in a period in which cheap energy, minerals, labour, transport and credit is over. Global Action Plan has already written about this in its Demanding Change series.

This is going to have all sorts of effects. One of them is that the rising prices we are currently faced with paying, for oil and gas and other basic goods and services, while perhaps levelling off, are unlikely to simply fall back to where they were. As the Resolution Foundation has pointed out, this will leave households with the same real terms income as they had in 2003 and, by next year, one-in-five households in absolute poverty.

The UK’s failure in the past decade to invest, especially in affordable green homes, onshore wind, household insulation and renewable heating is proving costly and has left us massively exposed to a sudden shock in global oil and gas prices. On top of decades of under-investment in communities and already chronically low household income across vast swathes of the UK, this may be one of the reasons why the UK is faring worse than most other, comparable economies.

'Energy bills would have been £9.5bn lower under the October price cap and £13bn lower in January, if successive Conservative-led governments had not rolled back climate policies over the past decade...
Savings wd hv been equivalent to £168 per household in Oct22 + £220 in Jan23' pic.twitter.com/rbumoAGBS9

— Paul Waugh (@paulwaugh) August 26, 2022

As you know, this comes after a summer of record temperatures, drought across England and against a backdrop of devastating floods in Pakistan, which have engulfed around one-third of the country.

You’ve used the environment as a punchbag during your leadership campaign, but the cost-of-living and ecological crises are wrapped around each other like DNA. Don’t try and boost UK production of oil and gas and restart fracking, as you’ve suggested you might. This will do nothing to influence the price of gas consumers pay, will undermine our efforts to tackle climate change and will soak up valuable investment that is needed to get us off oil and gas.

A quick🧵about the #CostOfLivingCrisis, the economy, inequality and the #ClimateEmergency. Because ... pic.twitter.com/tNmsFKt5CA

— Andrew Pendleton (@AJPendleton) August 2, 2022

Because global gas prices are at the heart of the problem, you cannot bring down energy prices for people and businesses without insulating homes and investing in renewable heat and power (the latter now the cheapest way to generate electricity). Similarly, drought and other climate impacts in the UK and the risk of further disruption in the global economy will prove increasingly costly to the economy.

You’ve said you will ‘rise to the challenge’ and be ‘radical’. It’s a word we at Global Action Plan like because it actually means ‘rooted’. You need to root your action in two principles: help for households focussed where it’s most needed and a radical shift in how we use energy for a future of climate change.

The potential macroeconomic impact of a cut in income taxes aside, the lion’s share will go to those earning the most, while those earning the least, who mostly don’t pay any tax anyway, will hardly benefit at all. Plus cutting taxes will do nothing to help households lower their energy bills in the future, which can only be guaranteed by a truly radical new plan in which local energy groups, councils and small firms are unleashed to ensure millions of leaky homes are insulated and boilers are switched out for heat pumps fast.  

There are lots of really good proposals around for what you should do, from the Warm This Winter campaign in which dozens of green and anti-poverty groups, including Global Action Plan, have come together to call for an end to fuel poverty, to Ovo Energy’s useful 10-point plan and NEF’s proposal for a free, basic energy quota for all homes.

In a nutshell, you need to target lots more support at the households that need it most (there are more of these every day), launch a massive insulation drive and double down on renewables investment. We also think you need a huge, public campaign to urge energy saving.

Right now, a freeze in energy prices while you line up your longer-term plan is unavoidable, mainly because you just won’t be able to target and help businesses in time. But getting the UK off gas by maxing out on cheap renewables and ensuring households and businesses use energy more efficiently are the only ways to ensure homes and small business can manage longer term. 

We think the politics of the moment leave you no choice but to do these things. The only choice you face is between doing them well, by thinking long term and about people and planet, or doing them badly.