UK gas supply issues will not see ‘lights going out’, business secretary Kwarteng says

British government accepts small suppliers could go bust due to high wholesale prices

Britain’s business secretary Kwasi Kwarteng. Photograph:  Ben Stansall/AFP via Getty

Britain’s business secretary Kwasi Kwarteng. Photograph: Ben Stansall/AFP via Getty

 

Britain’s business secretary Kwasi Kwarteng has insisted that the country is able to meet gas supply needs despite the failure of a number of energy companies. And he criticised as alarmist warnings from industry leaders about the possible consequences of soaring gas prices.

“There is no question of the lights going out, of people being unable to heat their homes. There will be no three-day working week, or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided,” he told the House of Commons.

Britain’s biggest energy companies have sought government help to cover the cost of taking on customers from smaller suppliers that have gone out of business since gas prices started to rise.

Mr Kwarteng said more suppliers could go out of business, but he ruled out propping up failing firms with public funds.

“The current global situation may see more suppliers than usual exiting the market but this is not something that should be any cause for alarm or panic. The government will not be bailing out failed companies. There will be no rewards for failure or mismanagement,” he said.

Meat processors have warned they could run out of CO2 , which is used to stun animals before slaughter, as well as in packaging and for beer and carbonated drinks. Two of Britain’s biggest fertiliser plants, which produce much of the country’s supply of CO2 as a by-product, have closed because of the rise in gas prices.

Reduced capacity

The British Chambers of Commerce warned that energy price rises could aggravate supply chain problems and push some forms into a more permanent reduction in operating capacity.

“The government must do all it can to safeguard security of supply and ensure that customers and suppliers have access to the support they need to weather this difficult period. Longer term, government should work with industry to explore how to increase the resilience of our most strategically important supply chains for key resources,” Suren Thiru, the group’s head of economics, said.

The surge in energy prices comes as inflation is rising and as the British government prepares to remove a £20 (€23) per week increase in universal credit benefit introduced during the pandemic. Former Conservative minister Damian Green warned that his government could be heading for a cost-of-living crisis.

“We are clearly coming into a huge problem for the cost of living for people. Those who are receiving universal credit, many of whom are in work and working as hard as they can to keep families out of poverty, are the ones who will be most hit by the upcoming problems with inflation and energy prices,” he told the BBC.

“We are facing a big global inflation problem, which I suspect will become the biggest political issue for the coming decade.”

Business Today

Get the latest business news and commentarySIGN UP HERE