Energy crisis: Fuel cap will remain and no risk of lights going out, Kwarteng assures

CONSUMERS should not be alarmed by the number of energy firms going bust, and there is no risk of the “lights going out”, the UK’s business secretary has said.

Kwasi Kwarteng told MPs that it was normal for small suppliers to go out of business as they questioned him on plans to help firms and protect consumer rights.

It comes as the price of gas has soared in the past nine months, with the cost of wholesale fuel rising by 250 per cent since January. 

Electricity has also risen, in part due to a key cable connecting France and the UK going on fire earlier this month. It is not due to be repaired until March next year.

Suppliers say they are unable to provide fuel at a cost that is affordable to them, due to the energy price cap imposed by the government and the rising wholesale costs. 

The cap is due to rise next month, however firms say it is still not enough to cover their costs and they are currently providing energy at a lower price than it is costing them to buy. 

However Mr Kwarteng told MPs that the price cap was “not going anywhere” and was going to be maintained. 

He also insisted the UK did not face any risk of energy supplies running out. 

Mr Kwarteng said it was “alarmist” to suggest that people would not be able to heat their homes in the colder months, adding: “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 will be no three-day working weeks or a throwback to the 1970s.

“Such thinking is alarmist, unhelpful and completely misguided.”

READ MORE: UK Government urged not to cut benefit amid soaring gas prices

The energy price cap is due to rise by £137, or 12%, in October. Those on pre-paid meters are expected to see price rises of up to £153 a year on their bills. 

Campaigners and opposition MPs argue that those on prepayment meters are more likely to be from lower income households, or reliant on benefits.

As a result, the government is facing renewed pressure to rethink its decision to cut to the £20 per week rise in Universal Credit, which will also come in to force at the same time as the rise in energy prices – October 1. 

SNP MPs were among those who called for the government to maintain the £20 increase, with Joanna Cherry and the party’s business spokesman Stephen Flynn among those who voiced concern in the Commons. 

HeraldScotland: Joanna Cherry was removed from the SNP's frontbench team last year

Ms Cherry asked if Mr Kwarteng would “seriously reconsider his position and lobby his colleague, the Chancellor, to reverse the £20 Universal credit cut?”

She added: “Many of my constituents are in receipt of universal credit, are hard-working people on low wages and they need this money to meet these spiralling energy costs and the increased cost of living.”

The minister replied that he constantly speaks with the Chancellor, but did not commit to any changes over the benefits cut. 

SNP business spokesman Stephen Flynn pressed Mr Kwarteng on the claims made by Boris Johnson before the 2016 EU referendum that gas bills would be reduced if the UK voted to leave the EU.

He told MPs: “Decades of underinvestment in renewable technologies, the barriers put in place by Brexit, 11 years of Tory austerity, a national insurance tax hike, the plan to rob £20 per week from those claiming Universal Credit, food prices rising, shelves emptying and now this: energy consumers facing skyrocketing, eye-watering bills.

“Let’s call this what it is: this is a cost-of-living crisis. And it is one created on the watch of this UK Government.”

He added: “What message would he have for the likes of the Prime Minister who, of course, told us in 2016 that if we vote to leave the European Union, energy bills would be reduced?”

However Mr Kwarteng criticised the MP, saying: “I find it extraordinary that he is still re-litigating the so-called Brexit wars. Absolutely extraordinary. This is a serious issue and it is not the time to re-fight the battles of five years ago.”

HeraldScotland: Ed Miliband accused of attack on Scotland's energy policy

Labour’s shadow business secretary Ed Miliband called on the government to diversify the UK’s energy supply to help the problem in the long-term. 

He said there should be more power drawn from renewables to protect against future rises in imported gas prices. 


Industry sources said the Government had been clear it would put consumers before businesses in difficulty during roundtable talks.

Following on from that meeting, they added that the industry is discussing two main solutions.

The first would be to create a Government-backed supplier to take on the potentially millions of customers whose supplier goes bust.

Another possible solution would be to guarantee loans for stable suppliers so they can afford to take on the energy customers of collapsed companies.

When a supplier collapses in normal times, Ofgem appoints another company to take over the account. However it is a costly and time-consuming process.

As well as energy industry concerns, ministers are grappling with warnings of potential shortages on the shelves as the knock-on effect of the gas price rise ripples through the economy.

Producers have warned that supplies of meat, poultry and fizzy drinks could all be hit due to a shortage of carbon dioxide (CO2).

It follows the shutting down of two large fertiliser plants in Teesside and Cheshire – which produce CO2 as a by-product – with the owners citing the increase in gas prices.

Mr Kwarteng said discussions are taking place to protect carbon dioxide supplies to help key sectors.


The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992