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Business Secretary Kwasi Kwarteng will hold emergency meetings with energy bosses as experts say bills could skyrocket by more than FIFTY PER CENT to £2,000 in Spring
- Kwasi Kwarteng set for crunch talks with major energy suppliers on Monday
- Energy bosses to ask Business Secretary for tax cuts, new green levy measures
- Experts have warned bills could skyrocket more than 50% to £2,000 in 2022
- Energy UK chief Emma Pinchbeck described the situation as a ‘national crisis’
- Meanwhile, Iain Duncan Smith MP blamed Vladimir Putin for ‘driving up prices’
The Government will hold crunch talks with energy industry bosses in a bid to address rapidly rising wholesale gas prices after providers warned bills could skyrocket more than 50% to £2,000 a year.
Business Secretary Kwasi Kwarteng will virtually meet with chief executives of major suppliers who are said to be asking for tax cuts and a relaxation of green levies, reports the Times.
Mr Kwarteng, who is also the Energy Secretary, has already been talking to chief executives individually.
Fears of runaway household bills in the new year have been mounting since rising gas prices began bankrupting suppliers in September. Since then, prices have risen from 54p per therm of gas to £4.50.
In total, more than two dozen energy suppliers have defaulted since September, costing the industry more than £1.8billion and leaving millions of customers in limbo.
Those figures will rise exponentially once the 1.6million customers using Bulb, which was placed under £1.7bn government-protected administration measures, are also accounted for.
Business Secretary Kwasi Kwarteng (above) will virtually meet with chief executives of major suppliers who are said to be asking for tax cuts and a relaxation of green levies
Gas prices have surged over recent months. This graph shows wholesale prices up to November 30
Energy companies are prevented from immediately passing on rising gas prices to consumers due to the UK’s price cap on energy bills – currently set at £1,277.
Since 2019, energy suppliers in the UK have been subject to a price cap put in place by industry regulator Ofgem, limiting the amount they can charge customers.
But the watchdog is set to rise the cap significantly from April 1, which will in turn lead to higher prices for consumers.
The soaring wholesale prices are due to a combination of problems with global supply chains and could rise as much as 56% according to some predictions from the investment bank Investec.
It comes after Good Energy, EDF and trade body Energy UK called on the Government to urgently intervene after the cost of gas in wholesale markets rose by more than 500 per cent in less than a year. It is currently at £4.50 a therm.
Emma Pinchbeck, chief executive of Energy UK, described the situation as a ‘nationwide crisis’, telling BBC Radio 4’s Today programme: ‘Domestic energy prices are going to go up 45% to 50% in the spring.
‘It is looking pretty serious for the spring. This is a system-wide issue now. We are asking for the Treasury in the UK to intervene as others have [in Europe].’
Yesterday, Conservative MP Iain Duncan Smith blamed Russian president Vladimir Putin for ‘driving up prices’ by restricting supply and said Europe was ‘in his hands’. He insisted Boris Johnson should be telling ‘crusties’ objecting to exploiting the UK’s resources to ‘get lost’.
‘The answer is very simple. We should be getting our own gas,’ he told MailOnline.
‘We are sitting on an island on top of gas and oil. We used to be net exporters, we are now net importers and it’s not because we’ve run out – it’s because successive governments stopped exploration and stopped development.
‘So the result is now that we are reliant on dodgy regimes like Putin and others for our gas, and that may salve the conscience of a few fanatical environmentalists, who don’t want the UK to get gas.
‘But we still require gas, otherwise we shut down. And that means we’ve made ourselves reliant on these dodgy regimes.’
Suppliers warned the cost will be passed on to households up and down the country, putting further pressure on already rising bills.
‘We have had record-breaking gas prices across Europe since September and over the last couple of weeks prices have spiked again and they are at levels we frankly have not really faced in the industry,’ Ms Pinchbeck said.
‘Particularly not in a winter period, with the UK in the middle of a pandemic, and other cost of living issues and inflation.’
Many in the energy industry blame part of the problems on the energy price cap.
The cap is currently set every six months, and as gas prices have soared in recent months it has forced suppliers to provide energy to households at eye-watering losses.
Michael Lewis, chief executive of EON UK, proposed the government remove VAT from customer’s bills, a move that could save up to £50 per year.
Other measures mooted by industry leaders include removing green levies as an additional surcharge on electricity bills to a form of taxation, saving around £150 each year.
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