The British economy will suffer the biggest blow from the energy crisis among the G7, according to the OECD

LABOR today slammed “12 years of Conservative failures on energy and economic security” after warning that worker shortages and “untargeted” energy support will cause Britain’s economy to shrink more than any other G7 nation.

The latest forecast from the Organization for Economic Cooperation and Development (OECD) suggests the economy is expected to contract by 0.4% next year and grow by just 0.2% in 2024.

Germany is the only other country in the richest group of nations to take a hit to gross domestic product (GDP) next year, down 0.3 percent, according to a report by the intergovernmental organization.

The body highlighted the “acute job shortage” after Brexit and workers choosing to retire during the Covid-19 pandemic.

He also criticized Tory ministers’ move to cap average annual power bills to a record £2,500 until March, arguing that attendance should have been more restricted.

Unions have warned that a lack of government investment in home insulation, gas storage and renewable energy has left workers in Britain exposed to the devastating impact of international shocks such as the war in Ukraine.

The OECD report said: “The untargeted energy price guarantee will increase pressure on already high inflation in the near term, requiring further tightening of monetary policy and increasing debt service costs.

“Better targeting of measures to cushion the impact of high energy prices would lower the budget cost, better preserve incentives to save energy, and reduce pressure on demand at a time of high inflation”: code to support prices even higher in an attempt to force a reduction in energy use.

The Prime Minister’s official spokesman Rishi Sunak blamed “challenges that are affecting different countries at slightly different times” and said support from next April, when the cap will rise to £3,000, will be more “targeted”.

But Shadow Treasury Chief Secretary Pat McFadden warned of a “fatal Tory loop”, saying the figures were “further evidence of 12 years of economic failure”.

“Next year we will have the lowest growth in the G20 except for Russia and we are forecast to be the only OECD economy to be smaller in 2024 than in 2019.

“This is the Tory vicious cycle: a spiral of low growth that leads to higher taxes, lower investment, reduced wages and poor public services. And they have no plan to get us out of this.”

The Wolverhampton South MP said Labor has a “plan to grow the economy, with a modern industrial strategy that works in partnership with business and a green prosperity plan that creates good jobs.”

The report came as Ofgem told 17 British energy providers to improve the way they support vulnerable customers.

The energy regulator said a review had also identified “serious weaknesses” in five providers: Good Energy, Outfox, SO Energy, Tru Energy and Utilita.

Ofgem’s director of retail, Neil Lawrence, said: “From eligible customers missing out on free gas safety checks to companies failing to identify vulnerable customers to offer them obvious support, this robust review has highlighted providers need to do more to support consumers.

The National Energy Action charity called the intervention a “wake-up call”.

Policy Director Peter Smith said: “The current energy crisis is creating enormous challenges for low-income and vulnerable consumers and, worryingly, much colder weather is ahead.

“Energy providers have a key role in helping to provide vital direct support and pointing struggling customers for additional support.

“Key improvements are needed to ensure vulnerable customers get the help they need during this difficult time.”

Leave a Reply

Your email address will not be published. Required fields are marked *