The government is preparing for the “worst-case scenario” of gas costs continuing to stay high beyond a “short spike”, a minister has told Sky News.
Speaking to Kay Burley, Paul Scully said high wholesale gas costs were placing “pressure” on the energy price cap.
Asked what the worst-case scenario was for a rise in the level of the cap, the business minister replied: “This is all part of the conversations that Ofgem will set that cap at, because supply prices are based on a number of factors.
“Clearly, as a government, we need to make sure we are planning for the worst-case scenario because we want to make sure we can protect consumers.”
Pushed on what a worst-case scenario could entail, Mr Scully said: “That it goes on for longer than a short spike. I can’t give you a figure now.”
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His comments are in contrast to remarks from Boris Johnson to Sky News earlier this week.
The prime minister told Sky News political editor Beth Rigby that Britain’s energy crisis was a “short-term problem”.
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Soaring global gas prices have thrown the industry into crisis, with six firms folding this month: PfP Energy, MoneyPlus Energy, Utility Point, People’s Energy, Green, Avro Energy.
There are fears that more could follow, with Bulb and Igloo reportedly on the brink of collapse.
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Ofgem warns more energy companies will fold
There are now roughly 40 suppliers in the UK market, sharply down from a peak of 70 in 2018.
The chief executive of Ofgem has warned that rising gas prices may not be temporary and more supplies could go out of business in the coming months.
Jonathan Brearley told MPs that “well above” hundreds of thousands of customers could be affected.
The energy price cap is set to rise from next Friday to £1,227, a record level.
Wholesale prices for gas have increased 250% since the start of the year, and there has been a 70% rise since August.
Consumers are protected from sudden price hikes by the price cap, but this puts pressure on suppliers as they cannot pass on the increase in wholesale gas prices to customers.
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Your energy bills might shoot up – here’s what to do
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.
The energy crisis is having a knock-on effect in other areas, with rising gas prices affecting carbon dioxide production.
Ministers have struck a deal with American company CF Industries, which produces around 60% of the UK’s CO2 supply, to provide “limited financial support” towards the firm’s running costs for three weeks to help it restart production.
The closure of its two sites last week had prompted fears that shoppers could start noticing shortages in poultry, pork and bakery products within days.
CO2 is injected into the packaging of perishable foods such as meat and salads to inhibit the growth of bacteria, typically prolonging the shelf life of products such as beef steak by around five days.
The gas is also used to stun animals prior to slaughter, and is deployed as a coolant for medicines and vaccines in the NHS, and likewise in nuclear programmes.
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PM ‘not worried’ about energy shortages
Speaking to Sky News, Iceland’s managing director said the UK has to become less reliant on gas by using a “broader energy mix” to prevent shortages.
Richard Walker said: “In the short term I’m more confident that supply chains will be more uninterrupted.
“Certainly in our own business we’ve been building up stocks of key lines that potentially could have been at risk, like frozen meat for example, and we’re confident that we have fully stocked shelves.
“However I think we’ve now got to think longer-term. This loan is only three weeks: what happens after that, or what happens the next time the gas prices spike?
“So we need a broader, more diverse and therefore more sustainable energy mix so we’re not so reliant on gas.
“We also need to look as a food industry, but also further up the supply chains, at different, better ways of capturing CO2 and potentially using alternative gases as well.”
Reform UK has hit back at both the Archbishop of York and the government following criticism of its immigration policies.
Leader Nigel Farage announced the party’s flagship immigration plan during a flashy news conference held at an aircraft hangar in Oxford on Tuesday.
The party pledged to deport anybody who comes to the UK illegally, regardless of whether they might come to harm, and said it would pay countries with questionable human rights records – such as Afghanistan – to take people back.
It also said it would leave numerous international agreements, and revoke the Human Rights Act, in order to do this.
The policy was criticised by the Conservatives, who said Mr Farage was “copying our homework”, while parties such as the Liberal Democrats and the Greens condemned it.
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Image: Archbishop Stephen Cottrell and Richard Tice MP. Pics: PA
But the plan came under fire from an altogether different angle on Saturday, when the Archbishop of York accused it of being an “isolationist, short-term kneejerk” approach, with no “long-term solutions”.
Stephen Cottrell, who is the acting head of the Church of England, told Sunday Morning With Trevor Phillips that he had “every sympathy” with those who find the issue of immigration tricky. But he said Reform UK’s plan does “nothing to address the issue of what brings people to this country”, and would in fact, make “the problem worse”.
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10:50
In full: Richard Tice on Sunday Morning With Trevor Phillips
Speaking on the same programme, Richard Tice, Reform’s deputy leader, responded to the archbishop’s criticisms, saying that “all of it is wrong”.
The MP for Boston and Skegness said he was a Christian who “enjoys” the church – but that the “role of the archbishop is not actually to interfere with international migration policies”.
Mr Tice then turned his fire on the government, accusing ministers of being “more interested in protecting the rights of people who’ve come here illegally… than looking after the rights of British citizens”.
He accused ministers of having “abandoned” their duty of “looking after the interests of British citizens”.
Mr Tice reaffirmed his party’s policy that the UK should leave the European Convention on Human Rights (ECHR), calling it a “70-year-old, out-of-date, unfit-for-purpose agreement”.
The Reform UK deputy leader also:
• Defended plans to pay the Taliban to take migrants back, comparing it to doing business deals with “people you don’t like”
• Said the Royal Navy should be deployed in the English Channel as a “deterrent”, but added: “We’re not saying sink the boats”
• Urged the government to call an early general election
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18:09
Farage ‘wants to provoke anger’
Meanwhile, Bridget Phillipson, the education secretary, told Sky News that Reform “want to provoke anger, but they don’t actually want to solve the problems that we face in front of us”.
She told Sunday Morning With Trevor Phillips the UK had a “proud tradition [of] supporting those facing persecution”.
But she added: “We will make sure that people who have no right to be in this country are removed from this country. That’s right. It’s what people expect. It’s what this government will deliver.”
Ms Phillipson also insisted there “needs to be reform of the ECHR” and said the home secretary is “looking at the article eight provisions”, which cover the right to a private and family life, to see “whether they need updating and reforming for the modern age”.
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However, she refused to say what the government would do if it is found that the ECHR is unreformable. Instead, she defended Labour’s position of staying in the governance of the convention, saying that honouring the “rule of law” is important.
She added: “Our standing in the world matters if we want to strike trade deals with countries. We need to be a country that’s taken seriously. We need to be a country that honours our obligations and honours the rule of law.”
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1:15:33
Sunday Morning With Trevor Phillips
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1:35
Asylum seekers to remain at Bell Hotel
Ms Phillipson was also drawn on the recent court ruling in favour of the Home Office, which overturned an injunction banning The Bell Hotel in Epping from housing asylum seekers.
Challenged on whether the government is prioritising the rights of asylum seekers over British citizens, she said it “is about a balance of rights”.
The cabinet minister also repeated the government’s plans to end the use of hotels to house asylum seekers by 2029.
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7:08
‘We should have overruled law’
Shadow Cabinet Office minister Alex Burghart said the Conservatives would be willing to leave the ECHR – if this route is recommended to them.
The Tories have asked a senior judge to look into the “legal intricacies” of leaving the convention, which he said is “not straightforward”. He said when the party receives that report, it will then make a decision.
Challenged on whether the Tories will leave if that is what the report recommends, he added: “If that’s what’s necessary, we will do it.”
Mr Burghart also said he believed the previous Conservative government’s biggest mistake was that “we did not go far enough on overruling human rights legislation”, which prevented it from “taking the tough action that was absolutely necessary”.
But he added the Conservatives have now “put forward very clear legislation that would solve this problem” – though he concluded Labour “isn’t going to do it” so the problem “is going to get worse”.
The Archbishop of York has told Sky News the UK should resist Reform’s “kneejerk” plan for the mass deportation of migrants, telling Nigel Farage he is not offering any “long-term solution”.
Stephen Cottrell said in an interview with Trevor Phillips he has “every sympathy” with people who are concerned about asylum seekers coming to the country illegally.
But he criticised the plan announced by Reform on Tuesday to deport 600,000 people, which would be enabled by striking deals with the Taliban and Iran, saying it will not “solve the problem”.
Mr Cottrell is currently acting head of the Church of England while a new Archbishop of Canterbury is chosen.
Image: Pic: Jacob King/PA Wire
Image: The Archbishop of York, Stephen Cottrell in 2020.
File pic: PA
Phillips asked him: “What’s your response to the people who are saying the policy should be ‘you land here, unlawfully, you get locked up and you get deported straight away. No ifs, no buts’?”
Mr Cottrell said he would tell them “you haven’t solved the problem”, adding: “You’ve just put it somewhere else and you’ve done nothing to address the issue of what brings people to this country.
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“And so if you think that’s the answer, you will discover in due course that all you have done is made the problem worse.
“Don’t misunderstand me, I have every sympathy with those who find this difficult, every sympathy – as I do with those living in poverty.
“But… we should actively resist the kind of isolationist, short term kneejerk ‘send them home’.”
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2:04
What do public make of Reform’s plans?
Image: Nigel Farage at the launch of Reform UK’s plan to deport asylum seekers. Pic: PA
Asked if that was his message to the Reform leader, he said: “Well, it is. I mean, Mr Farage is saying the things he’s saying, but he is not offering any long-term solution to the big issues which are convulsing our world, which lead to this. And, I see no other way.”
Mr Farage, the MP for Clacton, was asked at a news conference this week what he would say if Christian leaders opposed his plan.
“Whoever the Christian leaders are at any given point in time, I think over the last decades, quite a few of them have been rather out of touch, perhaps with their own flock,” he said.
“We believe that what we’re offering is right and proper, and we believe for a political party that was founded around the slogan of family, community, country that we are doing right by all of those things, with these plans we put forward today.”
Sky News has approached Mr Farage for comment.
Farage won’t be greeting this as good news of the gospel – nor will govt ministers
When Tony Blair’s spin doctor Alastair Campbell told journalists that “We don’t do God”, many took it as a statement of ideology.
In fact it was the caution of a canny operator who knows that the most dangerous opponent in politics is a religious leader licensed to challenge your very morality.
Stephen Cottrell, the Archbishop of York, currently the effective head of the worldwide Anglican communion, could not have been clearer in his denunciation of what he calls the Reform party’s “isolationist, short term, kneejerk ‘send them home'” approach to asylum and immigration.
I sense that having ruled himself out of the race for next Archbishop of Canterbury, Reverend Cottrell feels free to preach a liberal doctrine.
Unusually, in our interview he pinpoints a political leader as, in effect, failing to demonstrate Christian charity.
Nigel Farage, who describes himself as a practising Christian, won’t be greeting this as the good news of the gospel.
But government ministers will also be feeling nervous.
Battered for allowing record numbers of cross- Channel migrants, and facing legal battles on asylum hotels that may go all the way to the Supreme Court, Labour has tried to head off the Reform challenge with tougher language on border control.
The last thing the prime minister needs right now is to make an enemy of the Almighty – or at least of his representatives on Earth.