Why help with energy bills could come at a cost

March 17, 2026·16 min·1 clip

Why Sir Keir Starmer's promise to help with energy bills could worsen the UK's 100% national debt.

Host Neil opens by noting that the Iran war is causing energy prices to spike and that Prime Minister Keir Starmer has publicly signalled the government will support working people through the cost-of-living crisis. Economics editor Ed Conway explains that energy underpins all economic activity and that disruption in the Straits of Hormuz has created a significant oil and gas shortage, cutting off supplies previously sourced from Qatar. Conway warns that if the disruption continues for months, oil prices could rise from around $100 to $200 per barrel. He describes his own consumer anxiety about petrol prices, noting that inflation forces everyone to become unusually conscious of prices. Conway explains the previous government response to the Ukraine energy crisis: energy price caps that cost tens of billions of pounds and left a permanent mark on public finances. He states that national debt is now 100% of GDP, compared to the 40% level once regarded as alarming, and notes that debt interest payments now exceed the education budget. He walks through the mechanics of national debt — comparing it to GDP as a useful ratio — and explains the risks of governments printing money to service debt, citing hyperinflation in Weimar Germany and Zimbabwe as cautionary examples. Conway stresses that the Bank of England's inflation target acts as a counterweight to government spending, but notes the UK is in uncharted territory. A YouGov poll is cited showing 84% of Labour voters, 61% of Conservative voters, and 57% of Reform voters support energy price intervention, suggesting the decision may be as much political as fiscal. Conway argues the same respondents would likely resist the higher taxes needed to fund such help. He distinguishes between support for less well-off households, which he considers more defensible, versus blanket caps for wealthy households, which he calls questionable. Conway then addresses the UK's lost energy independence, revealing that in the 1980s the UK was the fifth largest oil producer in the world, producing more than Iran or Iraq, and was still ninth largest in 2000. Unlike Norway, which saved North Sea revenues in a sovereign wealth fund, the UK spent the money as general tax revenue, leading to lower taxes at the time but no long-term buffer. He argues that earlier investment in nuclear power and a more systematic North Sea strategy would have provided greater resilience today. Host Neil closes by noting that emergency fixes have become so routine that the public now expects them, and argues that real leadership requires planning for shocks rather than repeatedly subsidising their effects.

As heard by us

A handout may ease the pressure, but the bill keeps growing.

Why help with energy bills can come at a cost treats a familiar promise as a live fiscal problem. Neil sets the relief talk against heavier borrowing and debt-interest costs that already sit above the education budget, which gives the episode real bite without dressing it up.

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If you want the politics behind another energy handout, start here.

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