Why is Britain so exposed to rising energy prices?

Coffee House Shots

The Spectator

News, Daily News, Politics

4.4 • 2.2K Ratings

🗓️ 31 March 2026

⏱️ 10 minutes

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Summary

The IMF has warned Britain is particularly vulnerable to another spike in energy prices, and is more exposed than many of its European neighbours. Why is that the case? And does the government have any real plan to shield households and businesses from the fallout? With the Tories and Reform calling for the government to drill baby drill, why is the government avoiding a pretty obvious solution?

James Heale speaks to Tim Shipman and Michael Simmons.

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Transcript

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0:00.0	Hello and welcome to Coffee House Shots. I'm James Seale and I'm joined today by Michael
0:08.2	Simmons and Tim Shipman. Now Michael this morning, the IMF has said that the UK is particularly
0:13.1	exposed to an energy price surge as a result of the Iran War. Tell us more. Well, this is just another
0:18.0	example of an international organization stating the bleeding
0:21.6	obvious and telling us what we already knew. Last week, it was the Paris-based OECD, and this
0:26.9	week it's the Washington-based IMF. And why have they said this? Well, they've said that this energy
0:32.4	crisis is going to be as bad as 2022 when gas prices surge because of Russia's invasion of Ukraine
0:40.7	and they singled out us and Italy as two places in Europe that are particularly affected by that.
0:47.8	Why are we particularly affected by that?
0:49.4	Well, because of the way our energy system works is because the gas price sets the kind of marginal cost of
0:56.5	electricity generation and energy usage. So if gas prices do spike more and more, as it seems to
1:04.3	be the expectation now, then we will be, you know, we will suffer particularly hard about this.
1:10.4	The government seems to have, in a way,
1:12.9	thrown in the towel slightly on this. Stormer had this meeting yesterday with bosses from
1:17.7	shipping firms, Reeves is calling round the leaders of supermarkets, and from those inside the room,
1:23.4	the message seems to be, look, the government can't solve this on their own, correct. They need
1:29.4	businesses to help. I'm not clear what the Chancellor and the Prime Minister expect businesses to do.
1:34.8	I mean, I don't think they really believe this myth that there's all this price gouging and
1:39.1	profiteering going on, but I think it's a bit of an alarming situation we've reached where the
1:44.0	government's currently as businesses, please help us. Yeah, and the IMF is warning that the global impact of this crisis is going to be highly uneven, so the UK is very exposed, but countries such as Spain and France with their nuclear and renewable sectors actually could be well-intested. I suppose, Tim, that's going to obviously lead to the question which reform and the
2:01.4	Conservatives are pushing, which is about actually should we have North Sea drilling?
2:04.8	Well, that's the obvious question to ask. And I think one of the lessons of politics is that you should watch what they do and not what they say.
	...

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