Ministers must act immediately on soaring energy prices to avoid people being hit with a “lethal cocktail” of high inflation and recession, Alistair Darling, the Labour chancellor during the 2008 banking collapse, has said. With Liz Truss, the expected successor to Boris Johnson, still refusing to set out what additional help she could give households to pay bills, Darling said a key lesson from the 2008 crash was that action needed to be swift and radical. “You need something significant and substantial and you need it now, because people’s bills are going to start coming in in a few weeks’ time,” Darling, who served as chancellor under Gordon Brown, told BBC Radio 4’s Today programme. “If you don’t do that then you have the risks that I’ve been describing, that the economy will slip into recession, with all that entails. And when you’ve got that on top of the fact you’ve got inflation already at very, very high levels we haven’t seen since the 1970s, this is a lethal cocktail, which is why it needs bold action taken by the government now, not fiddling around with small measures that frankly won’t make any difference at all.” While the government has already offered some support to households, Darling said this was now far from sufficient to meet the scale of the crisis. He said: “Frankly, the stuff that’s been announced so far might have passed muster earlier this year. It simply won’t do now. You need something far more substantial than that unless you are willing to see substantial damage being done to our economy.” A lesson from 2008 was that “you’ve got to do more than people expect and you’ve got to do it more quickly than people expect if it’s going to work”, Darling said. “It’s going to cost money. When I announced the package in 2008 when it was the banking crisis, it amounted in total to about £500bn, but actually we got all of that money back over the following years. So what I think we need to see today from the government, from the new prime minister, is measures that will be big enough to deal with this.” One new poll has said energy prices, which will increase by 80% in October and go up sharply again in January, mean 23% of UK adults will not use their heating at all this winter. Truss has not ruled out offering direct support to people with energy bills, but she has repeatedly said her primary focus would be tax cuts, an intervention that would disproportionately benefit better-off households and offer less or no help to people reliant on pensions or benefits. The result of the Conservative leadership contest will be announced next Monday, with Truss seen as almost certain to defeat Rishi Sunak. The winner is expected to be made prime minister the next day.
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