The huge increases in energy prices will lead to immense hardship for homeowners. These rises will also put businesses at risk and create further price hikes all round. The UK Government has put together a £37bn package to support people through this crisis. Obviously, it is targeted at those on the lowest incomes but everyone will receive a £400 energy bill discount in October. I accept this will be nowhere near enough to compensate for the rises we all face. The problem is that not enough oil and gas is being pulled out of the ground to meet the immense demand worldwide. Demand and prices were rising before the war in Ukraine as economies bounced back from Covid. When Russia invaded and sanctions were put in place, prices skyrocketed. Last year, 40 per cent of gas used in the EU came from Russia. If Putin ends all supplies, then in a few months there will be another surge in demand for whatever gas is available on the world markets.
Energy companies are making massive profits because there is enormous demand for the gas and oil they produce. Those who are based in the UK will face increased taxes on profits made from UK gas and oil fields, but we have no way of taxing foreign-based companies who make profits on oil and gas produced abroad. Many environmentalists want an immediate end to the use of gas for heating because of concerns over carbon emissions. My view is we can do this over a 30-year period, but right now we are seeing just how vital it is for our nation to have its own reliable supply of gas. We should continue the transition to renewables but make as much use as possible of our own sources of gas. We should certainly consider opening up new sites and making use of new technology to get at gas deposits in Britain which have never been exploited.
The UK Government is looking at further financial help on top of the £37bn package. But no government in the world will be able to shield its population from the effect of ever-increasing demands for gas. We will also be encouraging those countries which have gas and oil (apart from Russia) to increase production by enough to meet demand and bring some stability to prices. Every country in Europe is going to face severe financial difficulties over the coming years. But I am certain we will not falter in any way in our support for Ukraine and will instead end forever Russia’s use of energy to fight war by other means. I also believe we are a naturally inventive people. Many amongst the older generation can still remember the economic devastation the country faced after the Second World War. People found ways to survive and in the end our nation prospered. Times are difficult now, but we will find a way through.
*Published in the Monmouthshire Beacon on 31 August 2022 and Abergavenny Chronicle on 1 September 2022*