Energy crisis talks at No 10: Bosses of Britain’s biggest energy firms head to showdown meeting with ministers over winter price hikes as nation braces for blackouts and £4,200 bills while they pocket record profits
- James Cleverly said ministers would ‘knock heads together’ over bills and profits and press for solutions
- Executives being asked to submit breakdown of expected profits and payouts, as well as investment plans
- Rishi Sunak and Liz Truss continue to face questions about what they will do to help struggling families
Bosses of Britain’s biggest energy firms will face pressure from ministers about how they can help customers cope with rising bills at a crunch meeting at Downing Street today.
Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng will press gas and electricity company executives for solutions to the predicted spike in bills over winter.
The summit with utilities bosses comes after Cornwall Insight predicted bills are set to soar to around £3,582 in October, from £1,971 previously, before rising even further in the new year.
Martin Lewis yesterday claimed rising energy prices were a ‘cataclysmic’ financial emergency ‘that risks lives’.
Energy executives are being asked to submit a breakdown of expected profits and payouts, as well as investment plans for the next three years.
There has been anger at Shell, BP and British Gas owner Centrica announcing bumper financial results as households struggle.
Former prime minister Gordon Brown has suggested scrapping the price cap and negotiating lower rates with energy bosses.
There are also reports the windfall tax, currently limited to oil and gas, could be extended to electricity, although Mr Kwarteng is believed to be against this.
Rishi Sunak and Liz Truss continue to face questions about what they will do to help struggling families, while Labour has called for a ‘loophole’ in the oil and gas windfall tax to be closed to raise more support cash.
Chancellor Nadhim Zahawi (left) and Business Secretary Kwasi Kwarteng (right) will press gas and electricity company executives for solutions to the predicted spike in bills over winter
Where’s Kier? On holiday…
Labour is under pressure to explain why Sir Keir Starmer is on holiday after the party accused ministers of going missing at a time of crisis.
Sir Keir has been away for the past week and yesterday one of his frontbench team faced questions about when he will return and set out his plans for tackling energy bills.
Shadow education secretary Bridget Phillipson was asked on Sky News: ‘Where is Keir Starmer?’ She replied: ‘I think like everyone Keir Starmer is entitled to a holiday.’
On BBC Breakfast she was asked by presenter Sally Nugent: ‘I’m just interested to know, where is Keir Starmer?’
Miss Phillipson said: ‘We will hear further very, very soon about additional measures.’
Energy minister Greg Hands said in response to Labour adverts accusing the Government of going missing: ‘Sir Keir is on holiday. I have no problem with that. But why, from the sun lounger, put out a press release attacking the PM for being on holiday?’
Ahead today’s meeting, the Chancellor told reporters: ‘I think it’s important we all get round the table, I will continue to do the work I need to do as Chancellor, but I also want to challenge them, to say are you making the investment?
‘How can you help your customers? What more can we do together? That’s the reason for the meeting.’
Speaking in Belfast yesterday, he added: ‘What I want to do tomorrow is understand better how they’re committed to that investment in gas, because whatever happens we need energy security and we’ve got a strong strategy that Kwasi and I will continue to push hard.
‘The other area I want to look at is some of the energy producers, if you look at the renewable energy producers, the amount that they get paid is linked to gas prices.
‘So, they haven’t changed anything they’re doing, they haven’t had any increase in their input costs at all, but they’re getting a much higher return because of the unusually high gas price because of Putin.’
Mr Zahawi also said the Treasury has been preparing ‘options’ for the next prime minister on what further support could be given to people this winter.
Education secretary James Cleverly added: ‘The Chancellor of the Exchequer and the Business Secretary are actually calling in the leaders of those big energy companies to knock some heads together and basically hold them to account about what they’re going to do with those profits.’
Tory leadership candidate Mr Sunak has pledged ‘hundreds of pounds more’ energy bills support.
He told the BBC that it would be his ‘moral responsibility’ to offer more help with bills if he were selected as prime minister, in particular to pensioners and those on benefits.
EU prices are at near-record levels amid fears Russia could soon turn off the gas tap completely, with leaders already discussing energy rationing
UK gas prices are soaring after Russia began throttling off supplies to Europe, causing a global shortage as EU leaders scramble for supplies
Ms Truss appeared to back away from her previous position of providing no more ‘handouts’, telling GB News she would ‘do everything I can to support working families’ if made prime minister, while emphasising her preference for tax cuts.
The Foreign Secretary said she would act ‘as soon as possible’ with an emergency budget and was ‘determined to help people across this country through what will be a very difficult winter’.
Asked if she would consider removing VAT from energy bills, saving families around £210, she said: ‘There will be a budget on an urgent basis to deal with the issues we face. All of these issues need to be under consideration.’
Miss Truss declined to go into detail about how much support she would hand out, but repeated her pledge to ‘let people keep more of their own money’ through lower taxes.
Labour has called on the Government to close investment allowances in the energy profits windfall tax, which it has described as a ‘loophole’, in order to help households pay the bills.
Shadow chancellor Rachel Reeves said: ‘The Tories are handing oil and gas giants billions in tax breaks, just for them to pass it on to shareholders. The Government should be ashamed this loophole existed in the first place.
‘This isn’t right at a time when people are worried sick about how they’ll pay their bills.’
There has been widespread anger at Shell, BP and British Gas owner Centrica announcing bumper financial results while households struggle with soaring bills.
Mr Brown meanwhile told the Guardian that the Government should ‘pause any further increase in the cap’ on bills, and negotiate lower rates with each individual company after examining their balance sheets.
He also suggested ministers should temporarily nationalise any providers that go bust.
Energy bills has rocketed in recent months due to the rising price of natural gas, partly as a result of the war in Ukraine. Germany is, by a long way, the largest importer of Russian gas in the EU, but rising prices affect the UK too
Russia has reduced flows through the Nord Stream 1 pipe which goes to Germany to just 20 per cent capacity, sparking panic
‘Time and tide wait for no-one. Neither do crises. They don’t take holidays, and don’t politely hang fire – certainly not to suit the convenience of a departing PM and the whims of two potential successors,’ the former Labour prime minister said.
He added that Britain should spearhead the international response to the crisis with an emergency G20 meeting.
Mr Brown said: ‘British ministers – and no one has yet grasped this – should also be leading the way… in demanding coordinated international action with an emergency G20 early in September to address the fuel, food, inflation and debt emergencies.
‘These are global problems that can only be fully addressed by globally coordinated solutions.’
Mr Brown, who previously called for the Tory leadership contenders to set aside their differences and work on an emergency plan with Boris Johnson, has been joined in his calls by a boss at one of the UK’s biggest energy companies.
Philippe Commaret, managing director of customers at EDF, said: ‘We are asking Government and the two Conservative candidates to work with industry so we can find a viable solution for those customers most in need this winter.
‘Customers need to know now that help is coming. Delaying a decision will cause anxiety for millions of people, and discussions need to happen now.’
Consumer champion Martin Lewis also made similar calls, telling broadcasters: ‘I accept the point that Boris Johnson is running a zombie government and can’t do much, but the two candidates – one of them will be our prime minister – they need to get together in the national interest to tell us the bare minimum of what they will do.’
Liz Truss yesterday at a laid-back chat at Bedford Sports and Social Club in Greater Manchester. Both she and Rishi Sunak have come under pressure to produce a plan for tackling high energy bills
Mr Sunak (pictured during a visit to a synagogue in north London yesterday) has pledged ‘hundreds of pounds more’ energy bills support
A Government spokesperson said: ‘We are engaging with the electricity sector to drive forward reforms and to ensure the market delivers better results for people across the UK.
‘In the meantime, and as we announced in May, the Government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take.’
Yesterday, consumer champion Mr Lewis warned the cost of living crunch was turning into a ‘national crisis’ on the scale of the Covid-19 pandemic and accused ministers of acting like ‘zombies’.
Mr Lewis – who sold his MoneySavingExpert.com website for £87million in 2012 – said: ‘For every £100 direct debit you currently pay, in October you will be paying £181, and in January you will be paying £215, and that’s on top of the rises we had in April.
‘That is a cataclysmic rise for households; millions of households will simply not be able to afford it.’
He said a typical bill from January will be 45 per cent of the full new state pension, adding: ‘What we’re facing here is a financial emergency that risks lives.
‘I accept the point that Boris Johnson is running a zombie Government and can’t do much, but the two candidates need to get together in the national interest to tell us the bare minimum of what they will do.
‘If they can’t agree… what we need to hear now, because the mental health damage for millions of people who are panicked about this is manifest, is we need to hear accurate plans.’
A survey released yesterday by Uswitch suggested households are already getting in mounting debt with energy suppliers, even before the energy price cap is lifted.
It estimated that six million homes across the UK collectively owe around £1.3 billion to energy firms – three times higher than a year ago.