This energy crisis will define our next PM .... and lose them the next election

Some problems do not have solutions. We are in the middle (sadly, not at the end) of a historic crisis in energy supply, which is likely to cause a historically widespread inability of many millions of people to afford their energy bills.

This will hit the poorest the hardest, of course, but the financial damage is far from limited to those whom we would consider deprived. The average Joe and Joanne are going to be plunged into a set of financial circumstances we would have considered unthinkable just a year ago, paying more than £400 every month for energy.

We know the combination of toxic events that has caused the problem. The most obvious one is the war in Ukraine and the increase in wholesale prices caused by the instability of the supply from Vladimir Putin’s gas pipes. However, other factors lie closer to home.

UK governments of the Conservative and Labour types have, for decades, neglected to take seriously the need for security in energy supply, and indeed this may be seen in future as one of the great acts of negligence of our time. Nuclear power is a safe, reliable and green method of production yet, despite seeing old stations reach the end of their lives all over the country, not a single new one has been built this century. Wind has been insufficiently exploited, often for political reasons. We could be leaders in green energies of the future like hydrogen, too.

But none of that helps now, today. What does? What is the solution to this problem?

There are plenty of pressure groups popping up to tell us, but the understandable anger at companies in the energy sector making large profits is misdirected; we need them to make a profit in order that they can invest in these future energy supplies which will make our supply more secure, and our prices cheaper, in the future.

Instead, we look to our leaders to help us. We look to the two candidates for prime minister, Rishi Sunak and Liz Truss. They are likely to offer a short-term, symbolic response to help people. Scrapping VAT on energy bills, amending the green levies on bills or, indeed, making some sort of direct payment to help those most in need are, I suspect, the most likely options.

They are not insignificant; they may hold some families back from the brink. But they are a part-postponement of the problem rather than a solution.

The new prime minister should create a credible, long-term plan for a green, secure energy future free of political and ideological dogma, which in Scotland and the UK we have the natural and financial resources to create. But, even if they do, we will not see the fruits of that labour soon.

The most likely outcome, in truth, is this single issue will be the one that ends the next prime minister’s term in office before it really begins. The government of the day gets blamed for the crisis of the day, whether it is their fault or otherwise. It is a tale as old as time.

Gordon Brown was blamed for the international financial crisis in 2008, and lost the election in 2010. John Major never recovered from Black Wednesday and the Exchange Rate Mechanism crisis, and lost the election in 1997. And Liz Truss or Rishi Sunak will be blamed for the energy bills crisis, which may well be significantly more serious than either of those other events, and history tells us they are likely to lose the election of 2023 or 2024.

This crisis will define the time in office of the next prime minister. And it will probably end it, too.

As Liz Truss parades around the UK pretending to be the next Margaret Thatcher, the parallels with the Thatcher era may be closer than she thinks.

If, as seems likely, Truss does become our next prime minister, she would be well advised to study the history of the poll tax riots which ultimately led to Thatcher’s downfall. With dire warnings that average household energy bills are going to reach £5,000 early next year, the legacy of the poll tax “can’t pay, won’t pay” campaign is looming large.

The poll tax was introduced by the Thatcher government as a way of funding local councils. It was supposed to replace the rating system. Domestic rates were basically a tax on the value of your home and were deeply unpopular with Conservative voters because they targeted properties rather than people. Thatcher decided to replace the rates with a flat-rate, per capita charge that would be levied on every adult and set by local councils. It was immediately labelled as a way of saving money for the rich and hammering the poor.

Thatcher’s second big mistake was to order the poll tax to be introduced first in Scotland, ironically on April Fool’s Day in 1989, and then in England and Wales a year later. This led to accusations that Scotland was being used as a guinea pig. Things came to a head in January 1990, when Strathclyde Regional Council, the biggest local authority in Scotland, issued 250,000 summary warrants to Scots who had refused to pay the hated poll tax. Those who ignored the warrants faced sheriffs’ officers arriving at their homes and seizing furniture and belongings to auction in lieu of the outstanding debt. It caused outrage.

On March 31, 1990, the day before the poll tax was due to be introduced in England and Wales, a massive protest march was held in London. It attracted an astonishing 250,000 people, many of whom had been bussed in from around the country. The police struggled to control the huge crowd and inevitably, clashes broke out. Mounted riot police charged into the overcrowded Trafalgar Square and the riot escalated. Shop windows were smashed, goods were looted, cars were overturned, fires broke out and there were mass arrests – 113 people were injured.

It was the beginning of the end for the poll tax and for Thatcher.

With new forecasts that the price cap for household energy bills will reach £5,000 by April, the potential for mass non-payment campaigns, like the poll tax protests, have become a manifest reality. Already a Don’t Pay UK campaign has been set up, calling for a mass payment strike and urging protesters to cancel their direct debits on October 1. The group claims to have the support of over 100,000 people so far.

Thatcher famously said: “The wisdom of hindsight, so useful to historians and indeed to authors of memoirs, is sadly denied to practicing politicians”. Truss should take note.