The West’s decision to impose sanctions on Russia in response to its invasion of Ukraine – leading to a further spike in oil and gas prices – is our contribution to Kyiv’s efforts to defend itself from tyranny.
As Olena Zelenska, Ukrainian President Volodymyr Zelensky’s wife, said recently, while people in the West “start counting pennies on your bank account or in your pocket, we do the same and count our casualties”.
The Prime Minister was also correct when she warned the UK had allowed itself to become “too dependent on authoritarian regimes”. The world’s democracies need to wake up to the very real threats to peace posed by dictatorships, in addition to their contempt for human rights, freedom and life itself.
However, the problem with Truss’s remark – beyond the flippancy about the potentially deadly effects of fuel poverty – is that the wrong people are paying the price and they are paying too much.
The use of the blunt tool of a blanket energy price cap means wealthy people with larger homes will benefit more than those struggling to survive. Had financial support been targeted more closely, it would still have gone to a substantial portion of the population, but the cost to the public purse would have been less and those in genuine need could have got more.
The decision to fund all this mainly by government borrowing, rather than increased energy windfall taxes is even more wrong-headed. Truss said she did not want higher energy costs “to be passed on to bill payers”; her plan will simply see the costs passed on to taxpayers.
And that cost is truly enormous; estimates suggest the bill for the new energy price cap could be between £130 billion and £150 billion over 18 months – public money pouring into the bank accounts of energy companies already swimming in money.
As Truss prepares to cut taxes, in the hope of boosting growth despite global economic problems, running up vast debts feels like a dangerous gamble. We may soon come to regret Conservative party members were not listening when defeated leadership candidate Rishi Sunak warned “borrowing your way out of inflation isn’t a plan, it’s a fairytale”.