US News

Energy bills to rise over winter months as fears grow about food supplies

Hard-pressed families will face a “difficult winter” with rising energy bills and cuts to benefits, a Cabinet minister admitted.

Business Secretary Kwasi Kwarteng said the combination of rising gas prices and the looming £20 a week cut to Universal Credit was a “difficult situation” and he had spoken to Cabinet colleagues including Chancellor Rishi Sunak about the pressures facing households.

The Tory minister is grappling with a spike in gas prices which has left energy companies struggling and had a knock-on effect on food supply.

Around 4.4 million households on Universal Credit are poised to see their energy bills rise significantly in October – the same month they will typically lose more than 5% of disposable income as the £20-a-week uplift to the benefits payment ends – the Resolution Foundation think tank has calculated.

The energy price cap is set to rise by £139 a year (12%) to £1,277 for a typical gas and electricity customer from October 1 while the UK Government’s “uplift” in Universal Credit, intended as a temporary measure during the coronavirus pandemic, ends on October 6.

Kwasi Kwarteng speaks in the House of Commons about the energy crisis

The UK Government and regulator Ofgem have agreed the price cap will remain in place despite concerns within the energy industry about the impact it will have on firms left unable to pass on costs to customers.

Kwarteng said: “I’ve been very clear that the energy price cap is staying even though some energy companies I read today are asking for it to be removed, I’ve been very clear that that’s staying, so we’re protecting customers there.

“We’ve got the warm home discount, we’ve got winter fuel payments, which are again focused on the most vulnerable customers. So, we’re completely focused on helping vulnerable customers through this winter, particularly with regard to energy prices.”

Pushed on the issue of Universal Credit, he told the BBC : “It’s a difficult situation, it could be a very difficult winter.

“That’s why, as energy minister, I’m very focused on helping people that are fuel poor.

“Universal Credit, you will know, is an issue for the Chancellor and the Work and Pensions Secretary, I’m speaking to them a great deal about it.”

The rise in energy costs has led to a crisis in the food supply chain because of a shortage of carbon dioxide (CO2), produced as a by-product in fertiliser plants.

Kwarteng has held talks with fertiliser firm CF Industries, which has suspended operations because of the high cost of energy, leading to a national CO2 shortage.

The gas is used to stun animals prior to slaughter and also forms part of the protective packaging used to keep foods fresh.

Kwarteng said he hoped to have a “very clear plan” to get CO2 production back up and running this week.

He told Sky News he was “confident” of a resolution and “it’s pretty imminent”, adding the CO2 situation was “critical”.

Kwarteng acknowledged the problems in the energy market could see more firms go to the wall.

He told Sky News: “Firstly, we’ve got to look after customers, we’ve got to make sure there’s a continuity of supply, and we’ve got to look after the most vulnerable – and particularly elderly – customers, that’s my first priority.

“The second thing I’ve said is that I don’t think we should be throwing taxpayers’ money at companies which have been, let’s face it, badly run.”

He told Times Radio that “not every company” could expect a Government bailout, but support could be available for larger firms.

“Any support for those larger companies will be in terms of working capital, will be a loan, it won’t be just a grant, it won’t be just a blank cheque,” he told the BBC.

Ministers and industry figures have said there is no risk of the lights going out this winter, with energy supplies secure despite the rising costs.

To sign up to the Daily Record Politics newsletter, click here.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button