Ministers need to be honest with the public about the hardship ahead

As Putin’s monstrous war rages in Ukraine, it is impossible not to be consumed by rage and despair. In a war where the forces of good and evil couldn’t be clearer, it feels perverse to subject our own actions to scrutiny. And yet, if we are to understand how we found ourselves here and how we escape this tragedy, dispassionate analysis is essential. The uncomfortable reality is that the story of Russia’s invasion of Ukraine owes much to the hubris of a generation of Western leaders.

This complacency was based on flawed assumptions about the possibilities of the post-Cold War world. At first this was understandable – the peaceful collapse of the Soviet Union and a democratic revolution in eastern Europe was such a remarkable event that it appeared as though we had escaped the great power competition of the past. Convinced they had entered a new age, Gerhard Schröder, Jacques Chirac and Tony Blair disregarded decades of geopolitical experience. A strong Nato alliance that had deterred Russia for 40 years was allowed to fray; industrial strategy was disregarded as we took a punt on change through trade; and the West’s energy dependency was ignored altogether.

But Western leaders remained trapped in the illusions of the 1990s even as reality stared them in the face. After Putin invaded Ukraine in 2014, Angela Merkel rewarded Russia by approving Nord Stream 2. This enriched the Kremlin, entrenched the EU’s energy dependency and advanced Putin’s goal of ending Ukraine’s status as a gas transit state. As Putin rebuilt his military and fought a war in the Donbas, only a third of European states met their Nato defence spending commitments. Certain of the ultimate victory of liberalism’s ideals, they ignored the fact that only hard military and economic power can deter tyrants like Putin, not hashtag diplomacy.

We are now grappling with the consequences. Europe’s energy dependence on Russia has prevented the very toughest sanction package being assembled against Putin. Every day Russia receives $1.1billion from the EU in oil and gas receipts, and to facilitate those payments Germany and Italy have blocked calls for the total expulsion of Russian banks from Swift.

This crisis demands a new energy strategy. Decades of under-investment in nuclear has cost us precious time and expertise, and so it is vital that the Government continues to rehabilitate nuclear energy at speed. Following our offshore wind revolution, the Government should expedite onshore wind where it is locally popular as the cheapest and quickest way to reduce our gas dependency, and also invest in insulating homes, beginning with social housing and the poorest neighbourhoods, where recent schemes have proved successful.

Let this be the end of the childlike debate we’ve witnessed where all decisions are binary. Renewables, good; domestic fossils fuels, bad, even during our transition to net zero, so we import them instead, rather than maximising our own resources. Our world-class defence industry, bad, leading to pressure on pensions funds to divest their stocks in a bid to comply with the ESG (Environmental, Social, and Governance) industry, when in fact we now look to them to supply defensive weapons to Ukraine.

We must maximise North Sea oil and gas, urgently granting remaining licences, and we need to revisit the case for fracking with the brutal clarity of what energy dependence on authoritarian powers looks like.

However, there is a cost to defending a free Europe, and the months ahead are likely to be among the most financially challenging we’ve known. While the UK is only dependent on Russia for a tiny proportion of energy, we nevertheless remain exposed to global price spikes. With China’s demand for gas already forcing prices to record highs, the West’s move to cut out Russian oil and gas will lead it to spiral. And no matter how fast the Government moves to increase our domestic energy output, it cannot reduce our exposure in the short term.

Despite positive GDP figures this week, there is a serious risk of a recession. Inflation will continue to be, by recent standards, astronomical. This will be a cruel living standards crunch, impacting the things people simply can’t avoid: heating the home and putting food on the table. Disposable incomes are forecast to fall by the largest amount since records began in the 1950s. As the Prime Minister and Chancellor did so well in the pandemic, they need to level with the public.

The energy price cap gives a degree of breathing space to consider more help than that already announced. Given the likely hardship, extra support soon seems inevitable and vital. But if the Conservatives want to be the party of lower tax and smaller government, they cannot insulate us all from every global crisis. We will need to target our support carefully on the most vulnerable, for whom bills on the scale likely in October pose an impossible challenge.

The Ukraine crisis reminds us that the world can be a dark place. There are no final victories; our liberty is fragile and must be constantly defended. That requires energy independence and credible deterrence. It will be a difficult year for many and we, as a compassionate government, must act to help them, but the West will emerge stronger from the tough lessons it teaches us.

It is vital to improve our energy policy and boost defence, but such things do not come cheap

We must maximise North Sea oil and gas, urgently granting licences, and revisit the case for fracking