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Price hikes could force some families to choose “between heating or eating”, consumer groups had warned. Campaigners are now calling for emergency Government intervention to tackle the gas industry crisis that is threatening the price surge.
Business Secretary Kwasi Kwarteng told MPs the Government’s “number one” priority will be shielding households from the impact of the surge in the wholesale price of natural gas across Europe.
He said: “Customers, especially and most particularly vulnerable customers, must be protected from price spikes.
“I must stress that protecting consumers is our number one primary focus and will shape our entire approach to this important issue.
“I’d like to reassure all members, and honourable members and their constituents, that the energy price cap – which still saves 15 million households up to £100 a year – is staying, isn’t going anywhere.
“Consumers come first. We must protect our constituents.”
Mr Kwarteng also hit out at “alarmist” claims that the country could be hit by gas supply shortages this winter.
He added: “Britain benefits from having a diverse range of gas supply sources. We have sufficient capacity and more than sufficient capacity to meet demand, and we do not expect supply emergencies to occur this winter.
“There is absolutely no question of the lights going out, or people being unable to heat their homes.
“There’ll be no three-day working weeks, or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided.
“While we are not complacent, we do not expect supply emergencies this winter. This is a very important point. This is not a question of security of supply.
“The UK gas system has delivered securely to date and is expected to continue to function effectively, with a diverse range of supply sources and sufficient delivery capacity to more than meet demand.”
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Amid the growing crisis, Mr Kwarteng held emergency talks with energy firms and industry watchdog Ofgem yesterday.
Industry chiefs pressed for a taxpayer-funded bailout to stop more firms following four small energy suppliers that have ceased to trade in recent weeks as the crisis has intensified.
He warned that more gas suppliers may go out of business in the crisis.
Mr Kwarteng added: “It is not unusual for smaller energy suppliers to exit the market – particularly, I may add, when wholesale global prices are rising.
“The sector has seen regular entry and exit over the last five to 10 years, that is the feature of a highly competitive market.
“The current global situation may see more suppliers than usual exiting the market, but this is not something that should be cause for alarm or panic.
“We have clear processes in place to make sure all customers are supplied with energy.
“When an energy supplier typically fails, Ofgem appoints another supplier to take on serving the customers and there is no interruption to supply. I reiterate, our first and primary concern is for the customer.”
There has been a global surge in demand for liquified natural gas as economies reopen from the restrictions of the Covid pandemic.
A huge demand from Asia, coupled with extreme weather shocks in the US, is squeezing gas supplies in Europe.
Consumer groups yesterday warned the impact could be devastating. Campaigners have called for emergency Government intervention.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “This is a hugely unsettling time for millions of energy customers. It’s particularly worrying for many on the lowest incomes who’ll be facing the double whammy of rising fuel bills and a benefits cut.
“With choppy waters ahead, the single best thing the Government can do is keep its lifeline of £20 a week to Universal Credit.
“Ofgem must play its part and continue to provide support and protection, especially for those worried about their finances.”
Jonny Marshall, senior economist at the Resolution Foundation, said: “Low-income families are facing a cost of living crunch on several fronts this autumn with energy bills rising alongside wider price increases, while Universal Credit is also due to be cut by £20 a week.
“Around 15 million households are set to face higher prices next week when the energy price cap is raised.”
Financial expert Martin Lewis said: “There will be many people making the devastating choice between heating and eating. The Government is talking about intervening with energy companies. It needs to intervene with consumers as well.”
Boris Johnson pledged that the Government will fix supply problems driving the increased costs.
The Prime Minister, visiting New York yesterday, insisted the Government was working to tackle the gas crisis.
Mr Johnson said the Business Secretary was working “flat out” with energy companies.
He said: “Clearly their business model has been affected when the wholesale price massively spikes in this way and they have loads of customers on fixed retail prices. It’s very difficult.
“We’re working very hard to find a way through. Also to try to keep a steady supply of gas.”
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