Truss must rekindle Britain’s spirit of sacrifice as winter approaches

It feels as though the old certainties have deserted us this week. After the Covid pandemic and the Russian invasion of Ukraine, the death of Her Majesty the Queen leaves Britain in a reflective mood. And in its own way, the first act of our new prime minister has also been momentous.

The energy price freeze announced by Liz Truss, who took office on Tuesday, has put Britain on a war footing. It will dwarf the costs of the pandemic furlough and the 2008 bank bailout. The taxpayer is at war with Russia, to all intents and purposes, and there will be no retreat. But Truss must be nimble, and she must urge the rest of us to mobilise.

A price freeze is a horribly blunt instrument. The urgency of the situation has pushed the government into writing what looks dangerously close to a blank cheque, guaranteeing to protect businesses for six months, and households for two years. Since the true cost will depend on how high the wholesale gas price rises, the bill could end up exceeding the already eye-watering estimate of £150bn.

With numbers this big, it is imperative to mitigate the financial risk. If the price cap reduces the incentive to use less power, it could simply prolong the crisis and worsen the eventual bill, at a time when rising interest rates make borrowing more expensive. Ministers have been quick to say they are looking at increasing energy supply, by issuing new North Sea licences and lifting the ban on fracking. They will also try to prevent the taxpayer cash simply being funnelled into supplier profits by rewriting energy contracts. But they have been strangely reluctant to apply the same zeal to the most obvious solution: reducing the demand for energy.

Energy efficiency shouldn’t be a matter of ideology, but simply one of good housekeeping. Insulating homes and offices, turning down thermostats, installing heat pumps and solar panels — all of this can be done rapidly, and lay the foundations for true energy security. Done at scale, the impact would be significant, and the payback period on investment in efficiency is shrinking every day that prices rise.

In recent weeks Spanish shops, cinemas and airports have been told to limit air conditioning. French companies have been warned their energy will be rationed if they don’t use less power. But in Britain it’s business as usual, with Blackpool’s illuminations switched on and some hospitals lit up for a campaign.

Britain was once a leader in energy efficiency, with high insulation standards for new buildings, and subsidies for wind and solar power. Yet Boris Johnson’s energy security strategy, unveiled this year, had nothing on efficiency except a scheme that halves the cost of installing a heat pump — for only 90,000 homeowners over three years.

The green faultline runs deep in the Conservative party. On Wednesday, while the new energy secretary Jacob Rees-Mogg waxed lyrical about reversing the ban on fracking, the Tory MP Chris Skidmore was touring the north-west of England warning against ditching green policies. On Thursday, Truss appointed Skidmore to head a review of how to meet the net zero target to which she committed herself during the leadership contest. That was a smart move and suggests Truss realises she must bridge the divide.

A war footing requires an assault on energy waste, of the kind that should appeal to Rees-Mogg’s small-state instincts. This would involve a bonfire of the planning regulations that stop householders switching to renewables if they live in conservation areas or listed buildings. These are often the same people who are rich enough to pay for it themselves, yet a huge bureaucracy is devoted to preventing them. Rees-Mogg lives in the same London borough as me. If he wants to uncover some pettifogging bureaucracy, he should try to install a solar panel — as I’ve been attempting to do for 12 years.

Politicians are naturally shy of asking voters to make sacrifices. But the Russian invasion of Ukraine is a reason to speed up the transition to clean energy, not slow it down. It also gives ministers a platform to address the public about what is at stake.

There is talk in Whitehall of getting the energy companies to lead a public information campaign telling people to stop leaving appliances on standby, or to change the flow settings on boilers. But that campaign should be run in partnership with government. The public sector should be leading the way, with visible changes in every school, hospital, jobcentre and museum.

There’s no shortage of capital available for reliable infrastructure projects. Combined heat and power systems, solar panels and heat pumps could spur productivity and economic growth, which chimes with the new government’s stated ambitions.

Truss has proved herself a flexible politician, having campaigned on a ticket of no “handouts”, only to announce one of epic proportions once in office. To pay for it, she is eventually likely to have to back down on her pledge not to raise taxes.

Her resistance to a windfall tax on energy companies is understandable — I have argued against one on the basis that it could deter investment and unsettle investors. But while a task force is rightly working to rewrite contracts with energy generators, its very complexity makes a windfall tax look appealing as an emergency measure.

As the nation mourns, we are seeing a resurgence of some of the goodwill and solidarity forged during the early days of the pandemic. Truss may not be the best orator, but she needs to try to tap into that residual sense of fellow-feeling. For winter is coming, and it feels as though “normal” is over.

camilla.cavendish@ft.com