6 ways to protect jobs and households from the next gas price crisis

Once again, events beyond our borders are landing on kitchen tables and hitting workplaces across Britain. The conflict in the Gulf, following the US-Israeli strikes on Iran and the closure of the Strait of Hormuz, has sent gas prices soaring. 

This is the second major international gas price shock in five years, after Putin's invasion of Ukraine only four years ago. Now Trump and Netanyahu's war in the Middle East is pushing bills up all over again. Working people and their families should not pay the price of Trump’s or Putin’s illegal wars.

The immediate response matters. The TUC is calling on the government to act now to shield households and workers from the worst of this crisis. 

But we also need to be clear-eyed about the bigger picture. We cannot keep lurching from one gas price emergency to the next. It is time for the structural reforms that will protect the UK when the next shock hits, and there will be a next one.

1. Public energy that protects us from global shocks

Great British Energy is a welcome start. The principle that the British people should own and benefit from the clean energy resources of this country is exactly right. It’s taken for granted elsewhere in Europe.

But GB Energy as it currently stands is too small to make the difference we need. It should be expanded into a public energy champion that aims to grow - over time - to the model of France's EDF or Sweden's Vattenfall, companies that own substantial generation capacity and use that position to anchor stability.

The TUC previously called for at least £40 billion of capitalisation – to put it on a pathway to be a significant player. A publicly owned energy company operating at scale can do what private markets cannot: prioritise long-term energy security over short-term returns, invest across the full range of clean technologies, and plough profits back into lowering bills rather than boosting shareholder dividends. That is the kind of structural insurance policy that this country needs.

2. Warm homes that cost less to run

The Warm Homes Plan is a genuine step forward, bringing almost £15 billion of investment to households up and down the country, alongside thousands of much needed jobs. The government’s recent funding extensions are very welcome, but should be expanded to urgently bring Warm Homes to all nine million households that currently spend more than 10% of their income on energy.

Alongside a scaled-up Warm Homes Plan, we need to build fairness into how we price energy. Government should launch a social tariff alongside the next Price Cap rate to ensure that low-income energy consumers aren’t forced to choose between heating and eating or see their bills rise because of Trump’s illegal wars. This should be designed so that no one on low or average income is paying more than 10% of their income on energy, and that no-one gets into energy debt while energy companies rake in windfall profits. 

The TUC has proposed permanent percentage reductions to bills for lower-income households alongside an emergency reduction for all households on less than average income for the duration of this (and subsequent) energy crises, funded through a combination of higher tariffs for excessive consumption and fair redistribution from higher windfall tax receipts.

3. A manufacturing base that’s fit for the future

Lots of people have the perception that we no longer make anything in the UK. Despite significant decline, the UK’s industrial sectors, like chemicals, cement, automotive, pharmaceuticals, and more, still collectively support 1.4 million jobs and contribute the same GVA to the economy as the financial services sector.

These sectors are under severe strain, but losing them is far from inevitable. Supporting our manufacturing base isn’t about securing hand-outs to prop up dying industries, it’s about recognising the strategic value of a thriving manufacturing base for our national economic resilience.

Manufacturing industry supports resilience to crises in various important ways: allowing continued access to goods when imports are interrupted, supporting crisis response through switching production to meet new demands, and accelerating economic recovery by sustaining good quality employment in economically vulnerable areas.

Our manufacturing industries must be supported to thrive. This requires government to create the conditions in which investment in electrification and other decarbonisation pathways becomes common sense. This includes:

Strategic capital investment to support electrification, enabling industries to modernise and compete in international markets, and reduce exposure to volatile fossil fuel prices. 

Bold action to reduce electricity costs across the board, for example by shifting policy costs from energy bills to general taxation

Targeted support packages for the sectors that need it most, such as potteries, brickworks, and refineries.

4. Backing the real economy with infrastructure that works

The crisis demonstrates the importance of upgrading our infrastructure to future-proof the UK economy, create good jobs, and reduce our exposure to precisely the kind of fossil fuel price volatility we are living through right now. The TUC’s “Invest in Our Future” programme sets out the potential for boosting clean infrastructure investment by up to £30 billion per year. 

This is not a wish list. These are costed, shovel-ready investments identified by trade unions across sectors: retrofitting schools and public buildings; expanding bus and rail; upgrading industry; rolling out electric vehicle infrastructure; building battery gigafactories; and expanding the electricity grid to carry the clean power we need. The return on investment is clear: in the United States, the Inflation Reduction Act’s boost to public investment in clean technologies was followed by a 71% surge in private investment.

5. Strong workers’ rights, for everyone

None of these structural energy reforms will fully work if working people don't have enough in their pockets to cope with the cost of living. The Make Work Pay agenda - the New Deal for Working People, Employment Rights Act, genuine fair pay agreements - must be delivered in full and in good time. Workers in energy retail and across the economy have seen their real wages suppressed for years. Energy companies cut staff pay when profits fell, transferring the cost of bad market design onto their workers. 

There is only one way forward: government must ensure that clean energy jobs must be good jobs, with collective bargaining, across the board. 

Strong wages, secure contracts, and the right to organise are not just good for workers, they are good for the economy. A workforce with money in its pocket is a workforce that can absorb shocks. A workforce with strong unions is a workforce that has a say in how energy companies, industrial firms and public bodies are run.

6. An energy system free from profiteering

The energy regulator Ofgem has failed to curb profiteering in the energy system. Ensuring a fair energy system that delivers for households and industry also means preventing excessive extraction of shareholder dividends. Our energy system, and our energy bills, cannot be predicated on a system that prioritises profits and shareholder payouts. The review of Ofgem is long overdue and how the regulator operates must be overhauled to strengthen their power to prevent profiteering.

Proper regulation of core services like energy must make sure that commercial and cost considerations are not prioritised above all else. These must be balanced with explicit responsibility for delivering vital public priorities such as fair access to essential basic services, workforce resilience, decent pay and working conditions, and long-term investments. 

The lesson we must not fail to learn

Trump’s war on Iran and Putin’s war on Ukraine have damaged our economy, jobs and livelihoods. Both wars showed how dependent we still are on the whims of global fossil fuel markets. While the UK suffered from soaring prices, countries like Sweden, Portugal and Spain have barely been impacted. By expanding their home-grown clean power generation, all three have far lower exposure to volatile global prices than the UK – making their manufacturing sectors more competitive and their electricity bills lower. 

Learning the lessons is a security policy. It is a cost-of-living policy. It is an industrial strategy.

The TUC is clear: the answer to this crisis is not to continue relying on internationally traded commodities, or hope the next war happens somewhere else. The answer is to build the energy system that insulates Britain from price shocks, that creates the high-quality, well-paid clean energy jobs our members and their communities deserve, and that ensures the benefits of the energy transition are shared by everyone—not captured by shareholders.

• 1https://www.tni.org/en/article/beating-the-climate-clock