Tory MPs join energy firms demanding Boris scraps ‘green levies’ that can make up a QUARTER of household bills to avoid gas crisis triggering wave of ‘fuel poverty’ this winter
- Tory MPs and energy firms are demanding the PM scraps green levies on bills
- Warning that natural gas hikes could cause massive rises in costs for customers
- Ministers insist problems are temporary as global economy restarts after Covid
Tory MPs today joined energy firms demanding Boris Johnson scraps green levies to avoid the gas crisis triggering a wave of fuel poverty this winter.
The PM is facing pressure from his own side to suspend or axe the ‘stealth tax’ charges on household energy bills to fund subsidies on renewables – which critics say can make up around a quarter of electricity costs.
The calls came amid warnings ministers must act to keep the ‘lights turned on’ with gas shortages driving up prices, and taxpayers facing pumping billions of pounds into stricken energy firms.
Fears are mounting about the consequences of soaring wholesale energy prices – up 70 per cent since last month – that are sending providers to the wall and causing chaos for a range of industries.
Experts say that as well as spiralling bills for household energy, food supplies and even medical procedures are at risk as the pressures cause shockwaves across supply chains. One consultant said the problems are so huge they could ‘easily see a three-day working week’ across affected companies this winter.
Ofgem tracking of the day’s ‘spot’ price on natural gas underlines the sharp rise in costs
Tory MP Craig Mackinlay (left), who heads the ‘Net Zero Scrutiny Group’ of Conservatives, told MailOnline that the situation was ‘extremely serious’ and the UK faces ‘fuel poverty’ this winter unless Boris Johnson (pictured right arriving in New York last night) rethinks climate levies
Eon UK boss Michael Lewis wants the renewable energy subsidies to be funded through general taxation instead of addition levies on bills.
He has said that removing such additional costs is a ‘short-term imperative’ to help consumers during what is ‘going to be a very challenging winter’. British Gas owner Centrica has backed his calls.
Tory MP Craig Mackinlay, who heads the ‘Net Zero Scrutiny Group’ of Conservatives, told MailOnline that the situation was ‘extremely serious’ and the UK faces ‘fuel poverty’ this winter unless Mr Johnson rethinks climate levies.
‘The key is we have to remove the green levies because we cannot have these ridiculous prices being passed on to consumers, because we then will have energy poverty this winter,’ Mr Mackinlay said.
‘It is very obvious, we have to get rid of green levies temporarily or permanently. We need rapid structural reappraisal of our dash to net zero.
‘The primary role of government is to keep the show on the road, the lights on, people warm and businesses able to do what they do.
‘And we are getting perilously close to a failure of those primary functions. That does mean considering domestic gas production as far as we are able.
‘And no matter how unpalatable fracking has to be within that frame.’
He added that North Sea Oil should also be exploited as much as possible, gas storage boosted, and nuclear policy clarified after being ‘confused’ for decades.
‘The transition to Net Zero is going to be over a long period of time. Fossil fuels will be part of the mix for a long period of time. So it makes sense to be as domestically secure as we possibly can,’ he said.
‘This is putting into focus the parlous state of our energy policy or lack of it that we have had for 20 years. Governments of all persuasions have completely taken their eye off the ball for 20 if not 30 years.’
Former Cabinet minister John Redwood said: ‘With a chronic shortage of gas, little wind power and a dangerous dependence on imports he needs to change policy.
‘He needs to persuade the gas industry to open more gas storage. Germany has five times as much and France seven times as much proportionate to demand.The government needs to build a strategic reserve if the industry cannot.
British meat ‘could start disappearing from supermarket shelves in a fortnight’
British meat could start disappearing from supermarket shelves in a fortnight, industry chiefs warned today.
Nick Allen, chief executive of the British Meat Processors Association, said the shortage of CO2 risked processed grinding to a halt.
He told Sky News: ‘The meat industry, in particular the pig and poultry industry, use CO2 for humane slaughter. Eighty per cent of pigs and poultry are slaughtered using that process.
‘CO2 is a by-product of fertiliser. Those plants closed, and they account for about 60 per cent of the CO2 produced in this country. They closed at very short notice with no warning. It really hit us cold.
‘We’re hoping and praying the Government can negotiate with these plants to reopen. But even then, it’ll take about three days to restart.’
Mr Allen said meat manufacturers have said they have between five and 15 days’ supply left.
He added: ‘Then they will have to stop. That means animals will have to stay on farms. That will cause farmers huge animal welfare problems and British pork and poultry will stay off the shelves. We’re two weeks away from seeing some real impact on the shelves.’
‘He needs to liberate new Uk production from existing fields and stimulate more exploration and development. The UK is going to need a lot of gas for some years to come. It is cheaper, greener and safer to produce our own rather than import.’
Sir John added: ‘The energy market is so rigged by regulation, tax and subsidy it will take government interventions to sort out the current shortages.’
Dale Vince, chief executive of green energy supplier Ecotricity, has warned many energy companies will not make it to Christmas and said action must be taken to remove price caps and tax on energy bills while building renewable energy ‘as if there’s no tomorrow’.
Mr Vince told the BBC’s Today programme: ‘We’ve got a shortage of electricity at the same time there’s a global shortage of gas. You can’t fundamentally fix that, it’s a question of what sticking plasters we can apply to get through the winter.
‘The energy market is in crisis anyway. Small suppliers have been going bankrupt at the rate of one in every six weeks for the last two years.
‘There’s two kinds of energy company, those that are hedged – which means they have bought their electricity and gas going forward – and those that haven’t. Those that haven’t are going to go bust.’
He said other energy companies would refuse to take on the customers of collapsed companies because it would be ‘asking for trouble’.
He added: ‘We have fundamental problems in the energy market. We have a price cap that sets the energy price super low which allows a margin of about 2 per cent for energy companies which is suffocating.
‘We’ve got a Government stealth tax amounting to 25 per cent on everybody’s electricity bill which really needs to be removed. And, of course, we’re dependent on foreign markets for oil and gas.
‘We need to build renewable energy as if there’s no tomorrow. In the next 10 years we could go 100 per cent energy independent in our country for electricity and gas.’
Iceland supermarket boss Richard Walker told the BBC this morning that he was ‘shocked’ by how exposed the UK was to disruption.
‘This is no longer about whether Christmas will be OK,’ he said. ‘This is more about keeping the wheels turning and the lights on so we can actually get to Christmas.’
Business Secretary Kwasi Kwarteng is expected to hold more discussions with the energy industry later amid calls for bailouts. Five energy suppliers have gone bust recently, and there are reports that customers of those on the brink of collapse could be temporarily transferred to another company.
The Government could provide a loan to other firms taking on their customers, or even effectively nationalise small suppliers on the verge of collapse by appointing a ‘special administrator’.
Fears are mounting about the consequences of soaring wholesale gas prices – up 70 per cent since last month – that are sending providers to the wall and causing chaos for a range of industries. Pictured, empty shelves that usually stock bottled water at a Sainsbury’s supermarket
However, there are concerns that other firms will still refuse to take on the consumers. Other options include creating a ‘bad bank’ to take control of entities that can no longer operate on their own.
The UK’s sixth largest energy company, Bulb, was among those seeking help today.
The FTSE 100 tumbled to a two-month low this morning as gas supply fears combined with rising inflation to send a chill through financial markets.
Energy stocks were also among top losers, with shares of heavyweights Royal Dutch Shell and BP falling 1.5 per cent and 0.9 per cent respectively.
London Mayor Sadiq Khan insisted the government must ensure vulnerable customers are protected from price rises.
But the PM, who is at the UN general assembly in New York, tried to quell rising panic by insisting the problems should be ‘temporary’.
He said the energy squeeze was a result of the ‘world waking up from pandemic shutdown’, comparing it to everyone ‘going to put the kettle on at the end of the TV programme’.
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