Two weeks ago, the forecast was a 10% rise. Now it is 20%. Cornwall Insight, the energy consultancy whose price cap predictions are treated as gospel by the industry, has updated its numbers and they are grim: the typical household energy bill is on course to hit £1,973 a year from July, an increase of £332 on the current cap.

The cause is no mystery. The US-Israeli war on Iran has sent wholesale energy prices soaring. Qatar, one of the world’s largest LNG exporters, has seen its shipments disrupted by the closure of the Strait of Hormuz. European gas futures have spiked. And because the UK’s energy price cap is calculated based on wholesale costs in the months before each quarter, the volatility of the past four weeks is now baked into what consumers will pay this summer.

The Profiteering Question

Enter Richard Walker. The Iceland Foods chairman, recently appointed as the government’s cost-of-living czar, has broken ranks with the kind of bluntness that government advisers are not usually known for. He wants a temporary cap on energy company profits — not the consumer price cap that already exists, but a cap on the margins that producers and retailers are making from the crisis.

Walker’s argument is simple. When wholesale prices spike because of a geopolitical crisis, energy companies that locked in long-term supply contracts at lower prices make windfall profits. Those profits come directly from the pockets of consumers who have no choice but to heat their homes and cook their food. A temporary profit cap would prevent “profiteering” from a crisis that nobody in Britain caused and nobody in Britain can control.

The Government’s Silence

Downing Street’s response to Walker’s suggestion has been conspicuous in its absence. No endorsement. No rejection. Just the kind of studied silence that governments adopt when they know an idea is popular but have no intention of implementing it.

The reasons are not hard to find. Labour came to power promising to be business-friendly. A profit cap — even a temporary one — would terrify the energy sector and potentially spook investors at a time when the government is desperately trying to attract private capital into renewable energy. The politics are also complicated by the windfall tax that the party already imposed on oil and gas producers, which the industry has spent 18 months loudly complaining about.

The Human Cost

None of these political calculations will matter much to the pensioner in Hartlepool choosing between heating and eating, or the single parent in Glasgow watching the prepayment meter tick down. The UK entered this crisis in a weak position. Growth is barely visible. Unemployment is at a five-year high. Real wages have only just recovered from the post-pandemic inflation shock. A £332 increase in annual energy bills is not a line item. For millions of households, it is the difference between coping and not coping.

Cornwall Insight warns that its forecasts are being updated weekly while the conflict continues. If the war escalates further — and the 48-hour ultimatum from Washington suggests it might — the July cap could be even higher. The question is not whether this will hurt. It is how badly, and whether anyone in government will do anything to cushion the blow.