The rise in energy prices will be worse for those living in the north due to colder weather conditions, the Business Secretary has accepted.
The discouraging news for those in the north comes after ministers denied being complacent over 18-month warnings about risks to the UK’s energy supply.
Now it is likely those in the north will pay more for their energy bills than those living further south.
What has the Business Secretary said?
Business Secretary Kwasi Kwarteng admitted that people in the north would be hit hardest by rising energy prices due to colder winter weather. He was responding to a question from Labour’s Rachael Maskell, who said: “The rise in energy prices will disproportionately impact people living in the north because it is colder during the winter in the north.” Kwasi Kwarteng responded: “In terms of the gas price, the single most important determinant of it is the weather, and she’s absolutely right.”
“That’s why we’ve got schemes like the warm home discount and that’s why we’re absolutely focused on protecting the most vulnerable customers, wherever they are in the UK,” he said in the House of Commons earlier today (23 September).
What have Labour said?
Labour have accused the Tories of not being fully prepared and ignoring the warning signs.
Shadow business secretary Ed Miliband quoted a letter from energy regulator Ofgem warning of a “systemic risk to the energy supply as a whole” which had been sent 18 months ago.
Despite these attacks from the opposition, Small Business Minister Paul Scully has said Ofgem will ensure “continuity of supply” for any other consumers whose providers go bust.
However, he stated the Government could not guarantee those being switched to new providers would not have to pay a higher tariff than before.
Mr Scully admitted some people will face a “tough” winter ahead.
What is the current situation?
So far six energy companies have gone into administration in the last couple of weeks after a huge surge in wholesale gas prices.
Avro, with 580,000 customers, became the biggest of the recent failures to shut down on Wednesday.
Green also folded on Wednesday with Ofgem ensuring a new supplier is appointed to take over Avro’s customers and Green’s 255,000 households.
PFP, MoneyPlus, Utility Point and People’s Energy have all exited the supply market.
HUB Energy, which had 6,000 customers, stopped trading last month.
Many have been questioning the longevity of their energy supplier as warnings have been issued that more firms will follow.
Bulb scrapped its popular refer-a-friend scheme to raise new cash, while rival Ovo Energy changed its website by removing an invite to “get an energy quote in under two minutes”.
The Business Secretary said the “special administration regime” the Government had prepared for energy crises was in place if needed.
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