The decision by Ofgem, the gas market regulators, to increase the current cap on gas prices to £1,971 is another blow to millions already facing the worst cost-of-living crisis in decades. The government could intervene to prevent the rise but has not. It is a political decision that shows this government prioritises protecting shareholders over ordinary households.

The additional support offered by Chancellor Rishi Sunak is derisory. The £350 offered is far less than the £690 increase now anticipated for the average household bill. £150 is a Council Tax rebate that many poorer households, especially in London, will miss out on. Worse, £200 of the support will be in the form of a loan, to be paid back over the coming year—when gas prices are still expected to be high.

The government should instead maintain the existing cap, bring failing gas suppliers into public ownership, and levy a windfall tax on super-profits of major suppliers and producers to help cover the cost. And Labour must step up its demands for action. Calls by Shadow Chancellor Rachel Reeves and Shadow Energy Secretary Ed Miliband for a windfall tax are welcome, and both have highlighted the obscene profits some energy companies are making. But it was plainly a mistake to take public ownership off the table, and as the cost-of-living crisis worsens, proposing only VAT reductions is going to look feeble.

The gas price hike isn’t some natural disaster. Sunak has claimed that governments can do nothing about the rising international price of gas. But this is nonsense: a government that chooses to shield its citizens from rising international gas prices can do so. In France, the government has stepped in to cap gas price rises at 4%, forcing the majority state-owned electricity company, EDF, to foot the bill. In Norway, the government will pay 80% of people’s bills above a capped gas price. In Portugal, the government is capping energy prices for domestic customers, guaranteeing no increase in 2022.

Interventions like this can be expensive for gas suppliers, who have been yelping all year about their rising costs. The cap has meant they are unable to pass on the costs of rising gas prices to customers as much as they want to. In Britain, further deregulation by government in the early 2010s encouraged a flood of new companies into the domestic gas market. They rushed in to exploit the gap between the low international price and the relatively higher price they could charge to households. When the international price rose, their flaky business model collapsed. Over 20 energy companies have failed since September as a result. Their businesses have been taken over by larger companies or, in the case of Bulb energy, nationalised.

But at the other end of the market, the giant suppliers and producers are raking in huge profits. British Gas saw its profits double in the first six months of the year. BP has announced record profits. Shell made $14.1 billion in profit over the last year. Shell and BP have paid no corporation tax on their North Sea operations for three years. A windfall tax now makes sound economic sense.

The gas price cap itself was only introduced by Theresa May’s government in 2019, under heavy pressure from Labour at the time. It is designed to be reviewed by Ofgem every six months. Ofgem, not some mysterious market process, sets its value. If Ofgem chose to keep the cap where it was it could do. Few would care if this meant a squeeze on profits for larger suppliers, and if smaller suppliers go under, the legislation is there to quickly bring them back into public ownership, as we have seen with Bulb.

But instead of taking decisive action to protect households, Sunak has revealed his real priorities: protecting shareholder profits, not people. (Incidentally, let’s drop this nonsense about British company profits supporting British pensions: fewer than 4% of shares in British companies are owned by British pension funds. The majority of shares in British companies are owned overseas.)

Privatisation in the 1980s created this ‘profit-first’ system. The ‘Big Six’ gas companies who control 77% of the market have paid out £23 billion in dividends—six times the amount they paid in taxes. Consumers have also lost out, with household gas charges rising 50% in real terms since 1996.

Under the privatised system, profits come first, then maybe households, then government tax revenues last of all. The profit-first mentality has encouraged short-term thinking, too; Britain’s biggest gas storage facility, a disused gasfield off the Norfolk coast, was closed in 2017, in the belief that the international gas market would always supply whatever we need. As a result, Britain has just 2% of its annual gas usage stored, compared to 20-30% for countries across Europe, leaving it mercilessly exposed to global market conditions.

But additional storage alone won’t solve the energy problem. The long-run forecast is for gas prices to continue to rise across the globe. The International Energy Authority forecasts that even after the current spike in prices has eased, global gas prices will still rise nearly 40% by the end of the decade, as gasfields deplete and demand from faster-growing economies elsewhere in the world kicks in. Britain’s energy system, put together in the 1980s around the belief that gas would always be plentiful and cheap, will not cope.

There is an urgent need to overhaul Britain’s energy system, ramping up investment in domestic, renewable resources, and ditching privatisation. Some on the climate-delaying right claim that renewables will lead to higher domestic prices, but the opposite is currently the case. Analysis by Carbon Brief shows that he costs of green policy to UK households have actually fallen in the last 12 months, from £186 on average bill in winter 2021 to £173 today. These costs are expected to fall still further in the next six months (to £155) as renewable energy becomes cheaper. Cuts to renewable investment since 2013 have added, they estimate, £2.5 billion to household energy bills.

Gas bills are expected to go up in April. There is still time to reverse the cap hike, and implement the windfall tax. And the privatised, deregulated energy system, designed for a world of cheap gas and in ignorance of climate change, has to be dismantled.