After Covid, petrol price hikes, food shortages and a lack of HGV drivers people would be forgiven for thinking it’s time they were given a break. Now though, we face substantial increases in gas and electricity prices for all households.

The root cause is a big rise in the price of wholesale gas across the world, but the UK is particularly vulnerable for a few reasons.

Some 80% of UK households rely on gas to heat their homes. About half the supply of electricity is generated through gas power stations. And yet the UK can only supply itself with about half the gas that it actually uses. The rest has to be imported.

This makes the UK exposed to gas price rises in a way that other countries with a lower dependence on gas are not.

Years of under-investment in renewable energy has meant we are nowhere close to where we should be in replacing fossil fuels imported from elsewhere.

Let’s take homes; for years it’s been recognised that there is a need to move away from gas and towards other energy sources such as heat exchange. Yet the rollout of gas replacement has been snail-like. The UK government is simply not investing enough in helping people make the change from gas.

READ MORE: PM: Gas supplies will get better as "market sorts itself out"

There has also been a reluctance by successive Conservative Governments to grasp the problem. The Damascene conversion of the Prime Minister from climate sceptic to champion of renewable energy has been impressive even by his own standards.

Unfortunately, we are dealing with the legacy of successive governments to invest in alternative power sources. It was David Cameron’s government that reduced subsidies for solar power, even trying to do so while in the middle of a consultation of whether to do it! It was also that government that reduced subsidies for onshore wind in a short-term attempt to court political popularity. That is now costing us.

We have one of the best tidal energy resources in the world off our southern coast in the Bristol Channel, yet nothing has been done to harness it.

There was the proposal to build the Swansea Bay Tidal Lagoon but that was squashed. I was in those discussions, and the reason why Whitehall wouldn’t back it was they just thought it was a bit too new. They wanted to play safe and a huge opportunity was lost.

Is there any other country in the world that has a great resource on its own doorstep but then fails to utilise it in a sustainable way?

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They also couldn’t get right the pricing for nuclear power plants, a technology they understood. For too long there has been a mentality in the UK government that power stations should be built by the private sector, usually financed by companies from abroad. There was a time when we built these things for ourselves with public money, usually at a cheaper price. Now we expect others to do it for us on the cheap.

Wales lost the Wylfa B project, a new nuclear station that would have sustained 600 jobs and created many more. Whitehall ditched it because it wasn’t prepared to pay for it.

Successive UK ministers have said there is no chance of gas running out and I agree. What they keep on missing though is what this means for hard-pressed households.

For sure, there’ll be plenty of gas but at what price? It’s no comfort to those who can’t afford to heat their homes. It will also be no comfort to businesses who might be forced to shut down because they can’t buy energy at an affordable price.

It’s that affordability that’s key. Privatisation of energy promised competition and price reductions. In the future there will be little of either. There is a cap on the maximum price that energy companies can charge consumers, but this will lead to many companies going bust because they’re being squeezed between the cap and the rising price of gas. There is talk of 70 companies being reduced to 10. That looks more like a cartel than a competitive environment.

READ MORE: Should Wales turn to nuclear power to meet climate change goals?

Ultimately, this is a failure of the privatised energy market. Companies cannot charge what they want for good reason and they are required to take on board customers from other providers that fail. The danger is that so many providers will fail that a domino effect will be created that threatens the larger providers.

Yet still UK Ministers seem to place their faith in the market that at the moment cannot operate properly.

So instead of energy being provided by the state and seen as a national asset, it’s provided by a raft of private companies that might soon be much fewer in number. In the meantime, prices will go up and businesses - who already say that UK energy prices are far higher than other countries in Europe - will suffer even more.

And yet again, we have a situation where businesses that have made profits for years now turn to the taxpayer to bail them out when they’re in trouble.

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Profit indeed being privatised while loss in nationalised.

The answer for government should be simple. It’s been applied in the railway industry. Where private providers fail, don’t bail them out, take them over.

At least then we can start to move back to a time when the state saw energy provision as a core part of its work rather than farming it out to an uncertain market.

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