London Daily

Focus on the big picture.
Saturday, Apr 11, 2026

The race is on for affordable energy for the UK's homes and businesses

The race is on for affordable energy for the UK's homes and businesses

There's a new buzz phrase in government: energy independence.

The war in Ukraine has focused ministers' minds on the need to stop procuring energy from abroad and, when it comes to Russia, financing a foe in the process.

One backbench Tory MP did not mince his words, telling me "every missile dropped on Ukraine has been financed by the West buying Russian gas".

The challenge ahead for ministers is twofold: making sure we have enough energy to heat our homes, power our businesses and fuel our cars - and making sure it does not become so unaffordable that businesses collapse and households are pushed into poverty.

So what's the plan?

Well, the week after next, the prime minister and business secretary are expected to set out their "energy supply strategy".

It's likely to focus on four core areas: nuclear energy, renewable energy, making homes more energy efficient, and increasing North Sea oil and gas production.

On that last point: government sources insist this is not about burning more gas, but about sourcing more gas domestically while the UK moves to renewable energy sources.

Downing Street is adamant their net zero targets remain intact - despite opposition from a Net Zero Scrutiny group of backbench Tory MPs.

A source said cheaper energy from the sun, wind and nuclear was the "only real long-term answer to the cost of living crisis" and they "can't bung people subsidies forever because prices are high".

North Sea production could be stepped up in response to Russia's invasion of Ukraine


It now looks increasingly likely, for example, that planning laws could be loosened for onshore wind farms.

Ahead of the government's energy supply strategy, the prime minister is speaking to leaders of major oil producing countries around the world this coming week.

I'm also told Boris Johnson will be making announcements imminently about a new team of advisers to "kick" business into accelerating renewable energy plans.

I'm told these will include "one of the most distinguished industry experts out there" and energy finance experts who will form an "independent energy task force" - as well as a cabinet sub-committee of ministers.

Fracking calls


There is also a growing caucus of Tory MPs, including former ministers Lord Frost and Steve Baker, calling for the government to re-examine the controversial practice of fracking in the UK - drilling down into the earth to release shale gas.

A ban was placed on fracking in 2019 due to earthquake safety concerns, and the Tory manifesto said they would "not support fracking unless the science shows categorically that it can be done safely".

Many of its proponents, however, got excited this week after No 10 suggested the prime minister has agreed to look at it again to "see if it has a role to play".

Downing Street sources told me that with oil prices so high, there were things "we would have dismissed before that we can't dismiss now" - and while their end goal is new sources of energy, "in the transition period we need to pump more oil and gas of our own" and it's "in that context we should look at fracking".

Fracking has its champions in cabinet, with Brexit opportunities minister Jacob Rees-Mogg said to be "extremely keen" on the idea.

But the reality is the prime minister himself sees a lot of problems with it. Business Secretary Kwasi Kwarteng has also pretty stridently distanced himself from entertaining the idea.

Other senior government insiders feel, for all the talk of the door being left open to it, that this is partly to keep some of the more vocal backbenchers happy - with one saying they would be "staggered" if the prime minister folded on it.

Another joked, in response to various newspaper headlines, that you could say the Tory manifesto left the door open to fracking if the science changed - but that it hadn't.

Previous plans to introduce fracking have prompted protests in the north of England


While renewable energy is heralded as the solution to the cost of living crisis long-term, a more pressing political debate is how to mitigate soaring energy bills for households right now.

No 10 commissioned the business secretary and his team to come up with ideas for the upcoming energy supply strategy - including help for consumers.

The team distanced themselves from taking any particular view on this issue, but the options they set out were tweaks to the Treasury's energy bill rebate scheme - £200 loans for customers to be repaid in £40 instalments from 2023.

These included doubling the loan, delaying the start of repayments, and making the rebate more generous for poorer households.

The Treasury - who were not looped into this particular commission involving their policy - quickly shut down the idea of any changes to the rebate scheme being on the table.

Government insiders feel that, broadly, Tory MPs are content with the policy that was announced - although one described an internal "wobble" when the personal finance expert Martin Lewis publicly cast doubt on the "loan" element of the scheme.

But Tory MPs have been more vocal in calling for other government interventions on the cost of living.

Some want green levies or VAT on energy bills to be scrapped, the National Insurance rise scrapped, fuel duty cut, or further boosts to benefits like Universal Credit or the Warm Homes Discount.

While a Treasury source said the chancellor will "always review our policies and how we can help", it's unlikely these calls will be heeded at his upcoming Spring Statement on 23 March for reasons we set out here.

The National Insurance tax rise is definitely going ahead in April, and scrapping VAT or green levies on energy bills are "not a go-er", sources say.

The chancellor is not expected to tweak tax policy this month, which rules out cutting fuel duty for now, though it remains frozen.

MPs are getting noisier about pump prices though, and the door doesn't seem completely closed to further intervention should fuel prices continue to spiral.

Further boosting welfare benefits like Universal Credit and the Warm Homes Discount is also a thorny issue for the Conservatives.

One government insider stressed that the party has argued for years they need to "make work pay", another described expanding these benefits further could be a "disincentive to work".

The logic behind the energy bills rebate scheme, too, was that it applied to middle income, as well as the poorest, households - all affected by energy bill increases.

But critical Tories, including some former work and pensions secretaries, have argued unprecedented price rises since the pandemic demand a more generous approach to welfare.

Treasury sources have downplayed the suggestion that we are likely to see any major new cost of living announcements at the Spring Statement given the volatility of the current situation - and not being able to predict what gas prices will look like by October, when the energy price cap (the maximum households can pay for bills) is set to rise again.

But a Treasury source said: "We've essentially come up from a once in a lifetime crisis with the pandemic and straight into the next crisis… we will keep continuing to look at ways we can help people out."


"A year's worth of petrol price rises in six days"


Newsletter

Related Articles

0:00
0:00
Close
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
Reform UK Proposes Visa Restrictions on Nations Pursuing Reparations Claims
Public Reaction Divides Over UK Decision to Bar Kanye West
Calls Grow for UK to Review US Base Access Following Concerns Over Escalating Rhetoric
UK Indicates It Will Not Permit Use of Its Bases for Potential US Strikes on Iran’s Energy Infrastructure
UK Prime Minister Defends Decision to Bar Kanye West, Questions Festival Booking
UK Accelerates Efforts to Harmonise Medical Technology Rules with United States
Wireless Festival Cancelled After Kanye West Denied Entry to the United Kingdom
Australia’s most decorated living soldier was arrested at Sydney Airport and charged with five counts of war-crime murder for the killing of unarmed Afghan civilians
The CIA’s Secret Technology That Can Find You by Your Heartbeat Successfully Locates Downed Airman
Operation Europe: Trump Deploys Vance to Hungary to Save the EU
King Charles Faces Criticism From Some UK Christians Over Absence of Easter Message
Former UK Defence Secretary Raises Concerns Over Ability to Counter Iran Missile Threat
×