IF there’s one document you read today make it ‘Surviving 2023' by the acclaimed British economist Richard Murphy. He lays out in stark, almost apocalyptic, language why we’re entering an economic ice age and how our paralysed government and political parties should respond. Failure, he warns, means “people will die”.

We’re at the beginning of a domino effect which will topple the economy and ruin millions of lives. As energy and food become so expensive that many of us can no longer pay our bills, retail will collapse, houses will be repossessed, tenants will become homeless, the housing market will crumble, energy companies themselves will implode as customers won’t be able to pay prices demanded, and banks could go under.

Schools, hospitals and care homes won’t be able to stay warm and thus have to shut. What then? As Murphy says: “Pawn shops will be very busy this winter.”

No political party is taking the coming catastrophe seriously. Conservative frontrunner Liz Truss seems determined to make matters worse, Keir Starmer’s plan is a sticking plaster, and the SNP, while clearly mostly powerless, merely talks, offering little in terms of concrete policy suggestions bar soundbites.

Let’s summarise Murphy’s thesis. Covid, supply chain disruption, “Putin’s war” and the “resulting gas price hikes by profiteering energy companies” caused the inflation triggering the crisis. Low income households face 24% of their income going on energy – 80% of households face fuel poverty. “Wages relative to prices are falling dramatically.”

The Bank of England makes matters worse by “seeking to ruin the economy by imposing interest rate rises that cannot work”. This means recession. “Hundreds of thousands of companies are going to fail … with millions unemployed”. The crisis has partly been “engineered” by the Bank of England. Unless politicians wake up, we’re “in the very deepest trouble”.

Inflation can easily reach 15% by 2023. Both government and the Bank of England are trying to prevent wage increases creating a “downward spiral towards poverty”. Bank profits are inflated through interest rate rises. They’re “already making around £15bn of extra profit a year.” With GDP falling, we’re likely “heading for a significant recession … households will be placed under impossible stress”.

The current Tory plan is “obviously deeply inadequate”. Once price rises impoverish up to “15 million homes”, families will find it impossible to pay council tax bills, phone costs, mortgages and rent, car loans, and credit cards bills. Thus a deadly spiral begins. We face a “very rapidly developing household debt crisis”. Food banks could be “overwhelmed”, as may the NHS. People will “simply stop spending” resulting in a “rise in business failures and increasing unemployment. A serious economic recession is very likely”.

When people can’t pay their gas and electricity bills, energy companies can cut them off as a last resort – meaning they “lose access to heat, light, the ability to cook, access the internet, their phone … Lives will quite literally be put at risk. People will die”.

Energy companies will be the architects of their own destruction, however. If people can’t pay their bills, the companies will fail. “This is inevitable. You cannot try to sell … your product to people who cannot pay for it and expect to stay in business.” Energy companies “should be panicking”. They’re “at extreme risk”.

Murphy also warns that evictions will “skyrocket”. We’re “likely to have a homelessness crisis”. Banks will repossess homes but find there’s few able to buy, so the housing market could collapse. “That could … trigger a banking crisis.” With many care homes run for profit, once they close, as costs make operating prohibitive, “who then will care” for the elderly? There may also be a return to home schooling.

Energy prices are high “not by accident [but] by design … Ofgem is not a consumer protection agency. Its job is … to make sure energy suppliers are profitable. In doing its job, Ofgem harms consumers”.

However, none of this “is necessary”. Government can act. For starters, Ofgem should be reformed so it delivers a “fair profit” to companies “and no more”. The key to alleviating the agony is ensuring nobody pays “more than 7%” of their income on energy. The outlook shows low income families paying 24%. If average households are to avoid paying more than 7%, that alone would cost £10.2bn in support.

To help all but the very rich, £44bn is needed. Public services need around £80bn to stay operational. Covid-style business support would be £20bn. The “whole package” requires £144bn – “much less than the deficit in the first year” of pandemic, and “lower than the deficit in the first year after the 2008 financial crisis”. However, “the crisis now being faced is potentially bigger than either”. Failing to act means “the breakdown of the market as we know it, leading to deep recession”.

How to pay for it? One way is opting for “very short term deficit funding” as happened in 2008 and 2020. Murphy adds: “One of the very few advantages of Brexit is that how we run deficits is now up to us”. It’s “entirely permissible for the government to simply run an overdraft at the Bank of England”. Using “special reserve accounts” would mean “interest of no more than 0.1% pa need ever be paid, constraining the cost to a sum close to zero, and creating no future debt risk for the government as a result of creating new money for the economy to bail it out now”.

Mass tax reform is needed. There’s “no wealth tax” in Britain, for a start. “If increases in wealth … were taxed at the same rate as income … an extra £174bn” could be raised annually. Close tax loopholes. Banks should face windfall taxes as they’re now £15bn a year “better off” due to interest rate rises.

With those measures, the costs could be raised to pay for the support needed to fend off disaster. Clearly, in the long term we need to make ourselves energy secure by shifting to renewables.

Britain is “a wealthy country … when the country has £12trn of wealth, finding the required money will not be hard”. It can be done, as Murphy shows. It just takes political will. As Murphy notes: “I can live in hope.”