GAS DESTRUCTION
Brits may face multi-billion pound bill to bail out energy firms amid warnings gas crisis could see return of 3-day week
TAXPAYERS could face a multi-billion pound bill to bailout energy firms amid warnings Britain is facing a major gas crisis this winter.
Ministers have refused to rule out stepping in rescue package for suppliers on the brink of collapse due to spiralling global prices.
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Such an intervention would be the biggest since the 2008 banking crash and would cost ordinary Brits billions in the long run.
Experts have said the UK could even face a return to a 1970s-style three-day working week to prevent regular blackouts for crucial services.
There are also fears of food shortages in the run up to Christmas due to a shortage of carbon dioxide sparked by high gas prices.
Foreign office minister James Cleverly today vowed ministers will do everything they can to "protect consumers".
He said "ideally" the Government wants energy firms to "stay afloat organically through their own efforts".
But when pressed he repeatedly refused to rule out a massive bailout of the sector if it's required.
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Mr Cleverly said: "The priority is to make sure that we protect provision for consumers and ensure they aren't hit by a significant increase in gas prices.
"Those discussions will be ongoing. Exactly how we do that will be up for discussion of course, but those are our priorities."
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He also insisted that the energy price cap, which is due to be raised by 12% next month, won't be scrapped.
Business secretary Kwasi Kwarteng is in talks with energy suppliers over how to avert a full-blown crisis this winter.
They want him to set up a "bad bank" which would take on unprofitable customers from suppliers that go bust.
There are fears many Brits could struggle to switch to another provider because firms will be reluctant to take them on.
Such a move would mirror the action taken by the Government when Northern Rock went under at the start of the financial crisis.
Larger energy firms like Eon have also called on ministers to scrap green levies to ease the pressure on the industry.
It comes as the Bulb, the UK's sixth largest energy firm with 1.7 million customers, became the first to ask for a bailout.
Industry chiefs have warned the number of providers could plummet from 70 at the start of this year to as few as 10 by the end of it.
PM fix pledge
Boris Johnson, who is in New York today for the annual UN General Assembly, insisted the problems facing companies will be "temporary".
He said: "People should be reassured in the sense there are a lot of short-term problems around the world caused by gas supplies and shortages.
"This is really a function of the world economy waking up after Covid. It's like everybody going back to put the kettle on at the end of a TV programme.
"You're seeing huge stresses on the world supply systems. We've got to try and fix it as fast as we can. We'll have to do everything we can.
"But this will get better as the market starts to sort itself out, as the world economy gets back on its feet."
Julian Jessop, an expert at the Institute for Economic Affairs think tank, said taxpayers shouldn't have to foot the bill.
He said: "The poorest households should be protected from soaring bills, but the taxpayer should not be expected to write a blank cheque to bail out energy companies.
"Market forces need to be allowed to work and if this means that relative prices have to change to balance supply and demand, then so be it.
"There may be a case for government loans to fundamentally sound businesses which are facing temporary problems as a result of global shortages.
";However, these companies should still be expected to borrow on commercial terms.
"Otherwise, there is a risk that the industry fails to adapt and that it remains vulnerable to further shocks."
Q&A: Winter warning
WHY is gas so expensive?
Wholesale gas prices have soared 75 per cent this year thanks to global demand as the world emerges from the pandemic and countries compete for reserves.
WILL the UK’s gas run out?
No. Ministers insist the nation has plenty in reserve, with the majority of our supply coming from the North Sea and topped up by pipelines under the sea from Norway.
HOW does this affect food and drink supplies?
High gas prices forced two fertiliser factories to shut. They produced CO2 which was supplied to meat processors and brewers. The nation’s CO2 supply is set to run out in weeks.
WHAT is the Government doing about this?
Business Secretary Kwasi Kwarteng is in meetings to head off any shortages.
Some green taxes could be temporarily axed to help energy suppliers.
WILL this affect my bills?
The energy price cap is going up. Cheaper rates could come off the market.
But industry figures warned the UK could be headed for a full-blown energy and food crisis this winter.
Richard Walker, the boss of Iceland supermarket, said he was "shocked" by how exposed the UK is to disruption.
He told the BBC: "This is no longer about whether Christmas will be OK.
"This is more about keeping the wheels turning and the lights on so we can actually get to Christmas."
Clive Moffatt, a gas consultant and former government energy adviser, warned prices could go "through the roof".
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He said one consequence of that would be that some companies could "easily see a three-day working week" return.
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During the 1970s companies were limited to using electricity of three specified days and only at certain hours.
The system was introduced to spread out the demand on the national grid and prevent blackouts hitting vital services like hospitals.
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