Yes, Britain needs a pay rise – but let’s start by tackling crippling energy costs

This week, the energy price cap went up by nearly £700. Piled on top of stagnant or falling wages, falling universal credit, high inflation and the coming hike to national insurance, household budgets are at breaking point.

And that means more families pushed into fuel poverty, or even forced to use food banks to get by.

The chancellor’s response was hopeless. Most families will get just £7 per week in extra support through energy bill loans and council tax reductions. And more than half of this will need to be paid back.

More than anything else, Britain needs a pay rise. The real value of wages has not improved in the last two decades, and it is now declining again. The best way to get a pay rise is to join a union and work with your colleagues to win a pay rise from your employer.

But we also need action on the driver of high inflation: fuel costs.

The superficial cause is rising gas prices in global markets. Wholesale prices are four times higher than a year ago. But the UK has been hit harder than other countries. And that’s because of market failure.

The UK energy market was designed to allow start-up firms to compete by importing the cheapest supplies available. New companies proliferated as chancers entered the market. For them, it was simply a buy low, sell high, get rich quick scheme.

And it was a trap for UK consumers.

Companies could cash in as long as global prices remained low. But when the going got tough, the burden was always going to land on UK households and businesses. And that is what happened.

Our energy system should be designed to reward investment in clean and reliable domestic supply, and stop huge peaks in prices. So we need to redesign the system – with public ownership at its heart.

That will take time, but it’s crucial. Energy is a public good that must be affordable and reliable for families and businesses.

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Nearly two-thirds of the population say they would prefer utilities to be run by the public sector. And it is a fair way to make sure that UK people benefit from national investment in green energy infrastructure.

Alongside a plan for a better system, we need urgent intervention now by the government to support consumers and businesses through the current crisis.

While the last year has been terrible for energy consumers, it’s been a bonanza for North Sea oil and gas. UK licensed producers have seen their profits surge in line with global prices.

So let’s use those excess profits to ease the pressure on UK families – through a windfall tax on North Sea gas and oil producers. This approach is backed across the political spectrum – from the Labour front bench to the Conservative former energy minister Chris Skidmore MP.

The money raised would subsidise prices until the global price spike eases. And it would help accelerate green energy investment to reduce our dependence on imported gas and oil.

Help for families and businesses struggling with high energy costs, a windfall tax on excess profits, and a modern sustainable energy system that guarantees predictable energy prices, protects us all from wholesale price spikes, and reinvests profits for the public good. That’s how we get through this energy crisis.

Frances O’Grady is general secretary of the Trades Union Congress (TUC) which brings together more than 5.5 million working people from 48 member unions in England and Wales