Connect with us

Published

on

More energy suppliers could go bust this winter potentially taking government payments intended for customers with them, the chief executive of British Gas owner Centrica has warned.

Chris O’Shea told Sky News that the UK energy market, regulated by Ofgem, offers “wealthy individuals” behind some retail suppliers a “free bet” to speculate, with other bill payers liable for the price of failure.

More than 30 retail suppliers have collapsed in the last 18 months as a consequence of soaring gas prices, and he said some remaining suppliers could technically be trading while insolvent this winter.

He also warned that government energy support, paid to suppliers in advance, could be vulnerable in the event of a collapse, adding to the cost of failure being shared by bill payers.

“The energy retail market has been loss making for a number of years and so there are a number of energy suppliers that are in a precarious financial position and that’s just getting worse every day,” he said.

“Every day that they make more losses they get in a worse position the risk of failure increases. And I really worry that we’re going to see more failures.

“We’ve learned a lot from some of the new entrants to the market, some of them have brought in some good practices, but by and large they’re owned by wealthy individuals who have free bet.

More on Energy Crisis

“If this goes right, they will make even more money than they have today. And if it goes wrong, our customers have to pick up the cost – that cannot be right.”

The government has stepped in to support business and households with a cap on the maximum price for units of gas and electricity, reimbursing suppliers for the difference between that and the real cost of energy.

Customer deposits at risk

Mr O’Shea said the decision to pay suppliers up-front meant that money was at risk in the event of collapse, along with customer deposits.

“The government gives [the payments] in advance and that increases the risk. If that supplier goes under, and have taken that government money before they’ve given it to consumers, then that will just increase the cost of failure.”

Mr O’Shea was speaking at the Easington Gas Terminal on Humberside as Centrica began drawing gas from the Rough offshore storage facility for the first time since it reopened in October to try to improve the UK’s energy resilience.

The current overcast weather has cut solar and wind power generation in recent days, increasing the price and demand for gas and prompting a call from the National Grid to increase supply.

“Rough is working exactly as it should, which is to bring that gas from the offshore storage facility, put it into the system, meaning that we can make sure that we’re the gas fired power stations running with the gas to people’s homes, and we keep prices down for consumers,” Mr O’Shea said.

“If that wasn’t here today we’d have to look for alternative sources of gas, or we’d have to look for ways to cut electricity consumption. But definitely the place would have gone up by the simple economics of supply and demand. If demand goes up and supply doesn’t go up, then prices increase. So it is keeping prices down, but it also means we don’t have to look elsewhere.”

British Gas said the advert was filmed before the third COVID wave and industrial action
Image:
British Gas said the advert was filmed before the third COVID wave and industrial action

Rough is currently using only 20% of capacity but to increase needs £1bn of investment Centrica says relies on reaching a deal with government to guarantee a return, and the company would like to convert the storage field to hold hydrogen, doubling the investment required.

Windfall tax worries

Mr O’Shea said that Centrica is committed to the UK but warned that the recent increase in the windfall tax put oil and gas developments at risk, and could deter inward investment.

“A windfall tax doesn’t really create the right environment for investment into the UK. So I worry about the potential long term impacts on investment.

“I think undoubtedly what happens is that for companies that might have marginal projects that just about made economic sense before a windfall tax, those projects are unlikely to be helped by a windfall tax, and therefore there are several projects that may not come because of this.”

Continue Reading

Business

Vodafone internet services down for thousands of users

Published

on

By

Vodafone internet services down for thousands of users

Tens of thousands of Vodafone users are reporting problems with their internet

The outages began on Monday afternoon, according to the monitoring website DownDetector, which reported more than 130,000 issues with Vodafone connections.

A spokeswoman for the company said: “We are aware of a major issue on our network currently affecting broadband, 4G and 5G services.

“We appreciate our customers’ patience while we work to resolve this as soon as possible.”

The company has more than 18 million UK customers, with nearly 700,000 of those using Vodafone’s home broadband connection.

Vodafone users vented their frustration on social media.

“It’s like Vodafone has just been wiped off the earth. Not a single thing works,” said one X user.

More on Vodafone

Vodafone users were shown an error message when trying to access the internet provider's app
Image:
Vodafone users were shown an error message when trying to access the internet provider’s app

The Vodafone app also appeared to be down for users, with the company’s website briefly going down too.

The ‘network status checker’ on the website was also down, and when Sky News tried to test the customer helpline, it did not ring.

“There’s Vodafone down and then there’s Vodafone wiped off the face of the f***ing planet,” posted another X user.

Read more from Sky News:
Gaza deal latest: Drones reveal devastation
Madagascar president says coup under way

Jake Moore, global cybersecurity advisor at ESET, said the outage shows how reliant we are on modern infrastructure like mobile networks.

“Outages will always naturally raise early suspicions of a potential cyber incident, though current evidence points more towards an internal network failure than a confirmed attack,” said Mr Moore.

“The sudden outage, combined with the inability to access customer service lines, mirrors classic symptoms of a distributed denial-of-service (DDoS) attack, where attackers overwhelm the network so the site or systems collapse.

“However, malicious or not, this once again highlights our heavy reliance on digital infrastructure, especially in an age where we increasingly depend on mobile networks for everything,” he said.

“Ultimately, resilience is essential, whether the cause is a direct cyberattack, a supply chain issue or a critical internal error.”

Continue Reading

Business

Lloyds estimates £1.95bn hit from motor finance scandal

Published

on

By

Lloyds estimates £1.95bn hit from motor finance scandal

Lloyds Banking Group has set aside a further £800m to cover estimated costs associated with the car finance mis-selling scandal.

The bank said the sum took its total provision to £1.95bn.

It had been assessing the impact since the Financial Conduct Authority (FCA) revealed last week it was consulting on a compensation scheme, with up to 14.2 million car finance agreements potentially eligible for payouts.

The regulator had previously found that many lenders failed to disclose commission paid to brokers, which could have led to customers paying more than they should have between April 2007 and November 2024.

Money latest: How much a private investigator costs

Eligible customers could receive an average of £700 each under the proposals.

Lloyds said on Monday that it would be contributing to the consultation to argue a number of points.

More from Money

It said: “The Group remains committed to ensuring customers receive appropriate redress where they suffered loss, however the Group does not believe that the proposed redress methodology outlined in the consultation document reflects the actual loss to the customer. Nor does it meet the objective of ensuring that consumers are compensated proportionately and reasonably where harm has been demonstrated.

“In addition, the approach to unfairness in the redress scheme does not align with the legal clarity provided by the recent Supreme Court judgment in Johnson, in which unfairness was assessed on a fact specific basis and against a non-exhaustive list of multiple factors. The Group will make representations to the FCA accordingly.”

Please use Chrome browser for a more accessible video player

Car finance: ‘Don’t use a claims firm – here’s why’

Shares in Lloyds, which fell last week when the bank warned of a potential “material” increase in its provisions, gained more than 0.5% on Monday.

The estimated compensation figure came in below the sum some financial analysts had predicted.

The shares remain more 50% up in the year to date.

Another listed lender exposed to car loan mis-selling is also expected to raise the amount it has set aside.

Close Brothers, which has a £165m provision currently, saw its shares tumble 7% when it admitted an increase was likely once its analysis of the compensation consultation documents was completed.

Car finance makes up approximately a quarter of its total loan book.

Continue Reading

Business

Farming community responds to rumours of an inheritance tax U-turn

Published

on

By

Farming community responds to rumours of an inheritance tax U-turn

The budget may still be more than six weeks away, but rumours of U-turns and changes are already in full swing.

Over the last few days, there have been multiple reports that those inside Whitehall are considering tweaks to the controversial inheritance tax (IHT) reforms on farms announced this time last year.

Plans to introduce a 20% tax on estates worth more than £1m drew tens of thousands to protest in London, many fearing huge tax bills that would force small farms to sell up for good.

Now there are reports the tax threshold could be increased from £1m to £5m (£10m for a married couple) – a shift that would remove smaller farms from being liable to pay.

Please use Chrome browser for a more accessible video player

From February: Farmers continue tax protest

Senior figures in farming have long believed a rise could be the solution to save the smaller farms and it would satisfy most.

However under the proposals, the 50% relief on IHT would be removed for farms above the new threshold.

That means bigger farms, responsible for producing a large amount of produce in our supermarkets, could bear the brunt of the tax burden with the Treasury potentially increasing revenues.

More on Farming

Two senior farming figures told me today that while a threshold increase is welcome, it does nothing to solve an “insolvable” problem.

Read more: What’s the beef with farmers’ inheritance tax?

Big farms have more land to sell, but then they become smaller farms and either produce less, or even divide up, to avoid the tax entirely.

Richard Cornock runs a small dairy farm in south Gloucestershire, which has been in his family since 1822.

Richard Cornock plans to pass his farm on to his son
Image:
Richard Cornock plans to pass his farm on to his son


He hopes to pass it on to his son Harry, who is now 14 and training to become a farm manager.

“I’ve been under so much stress like most farmers worrying about this tax,” he said. “And I really hope they do push the boundaries on the thresholds, because the million pounds they propose at the moment is ridiculous.

“It’s been on my mind the whole time to be honest. I even looked into getting life insurance to insure my life and I can’t get it because I had a heart condition. And that was one way I thought I might be able to cover my kids…”

We paused our chat as he was too upset to continue – an illustration of the stress farmers like him have been under over the last 12 months.

Tens of thousands from the farming community took part in protests in London. Pic: Reuters
Image:
Tens of thousands from the farming community took part in protests in London. Pic: Reuters

The government says it won’t comment on “speculation” about any possible changes, but it has previously defended the IHT reform, saying most estates would not pay and that those who will be liable can spread payments over a decade.

Labour is under pressure to do something to appease the angry farmers, a rural vote that turned from the Conservatives at the last election.

I ask Richard whether any tweak or row back on IHT will restore faith in Labour?

“The damage has been done,” he says.

Continue Reading

Trending