The prime minister has described Britain’s energy crisis as a “short-term problem” and said he does not think there will be disruption to food supplies at Christmas.
Speaking to Sky News political editor Beth Rigby in New York, Boris Johnson said: “There is a short term problem caused by the hydrocarbon price spike, the gas price spike, caused basically by the huge demand in Asia.
“The market is going to start fixing it, but in the meantime the government will do everything we can to help people, to help fix it, to make sure that we smooth things over.”
Business secretary: ‘Challenging days ahead’He described it as a “function of the global economy waking up after a long state of suspended animation” due to the COVID-19 pandemic.
Soaring global gas prices have thrown the industry into crisis, with warnings that a number of energy companies could go bust in the weeks to come.
AdvertisementMeanwhile, the energy price cap is set to rise from next Friday to £1,227, a record level.
This means many families will face a double whammy of rising energy bills and the end of the £20-a-week uplift in Universal Credit next month.
More from PoliticsMr Johnson’s comments come after one of his ministers acknowledged earlier that hard-pressed families will face a “difficult winter” as a result of these two factors.
Business Secretary Kwasi Kwarteng said he had spoken to cabinet colleagues, including Chancellor Rishi Sunak, about the pressures confronting households.
Johnson on COVID, gas disruption and RussiaMr Kwarteng told Sky News earlier that some of the UK’s biggest energy companies could be offered state-backed loans in return for taking on customers from smaller suppliers if they go under.
Wholesale prices for gas have increased 250% since the start of the year, and there has been a 70% rise since August.
How to deal with spiking gas and electricrity bills amid the energy crisis.Consumers are protected from sudden price hikes by the energy price cap, but this puts pressure on suppliers as they cannot pass on the increase in wholesale gas prices to customers.
The rise has been put down to a number of factors, including a cold winter leaving stocks depleted, high demand for liquefied natural gas from Asia and a drop in supplies from Russia.
Four small UK firms have already gone bust and there are fears that others could follow suit, with energy company Bulb, which has 1.7 million customers, confirming it is seeking a bailout to stay afloat.
What happens if your energy supplier goes bust?If a supplier fails, Ofgem will ensure customers’ gas and electricity supply continues uninterrupted.
Customers will be switched to a “supplier of last resort” and any credit with the old supplier will be transferred.
If a supplier of last resort is not possible, a special administrator would be appointed by Ofgem and the government.
Your old tariff will end, and the new supplier will put you on a special “deemed” contract, which will last for as long as you want it to.
The deemed contract could cost you more, as the new supplier takes on more risk (for example, possibly having to buy extra wholesale energy at short notice to supply to the new customers), but Ofgem says it will try to get the best deal for you.
You should take meter readings, as you will need to pass these on to your new supplier.
Once your new supplier has been in touch, ask them to put you on their cheapest deal. Then shop around and switch if you want to. You won’t be charged exit fees.
The energy crisis is having a knock-on effect in other areas.
Food producer Bernard Matthews warned Christmas dinner could be “cancelled” in the wake of two large fertiliser plants, which produce CO2 as a by-product, shutting due to the sharp rise in gas prices.
CO2 is used to stun farm animals before slaughter as well as in the vacuum packing process, with the development also prompting warnings that shoppers could start noticing shortages in poultry, pork and bakery products within days.
It prompted warnings that shoppers could start noticing shortages in poultry, pork and bakery products within days.
However, as the PM was speaking in New York the government announced it has reached an agreement with CF Industries to restart carbon dioxide production at its UK sites.
And asked about potential disruption to Christmas, the PM replied: “I don’t think we’re going to have any problems on that scale.”
Mr Johnson said “Christmas is on” and stressed Britain’s supply chains are “very secure”.
