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There is “absolutely no question of the lights going out” this winter amid escalating energy prices, the Business Secretary has said.
He said it was “alarmist” to suggest people would not be able to heat their homes in the colder months and he assured the UK’s energy supply had “sufficient capacity” to meet demand.
Wholesale prices for gas have surged 250 per cent since January, with a 70 per cent rise since August alone – leading to calls for support from the industry and the collapse of some smaller energy firms.
Speaking in the Commons, Mr Kwarteng said Britain has a “diverse range of gas supply sources”. He added: “I must stress that protecting consumers is our number one primary focus and will shape our entire approach to this important issue.
“Secondly, I also want to reassure the House that while the UK like other countries in Europe has been affected by global prices, Britain benefits from having a diverse range of gas supply sources.
“We have sufficient capacity, and more than sufficient capacity, to meet demand and we do not expect supply emergencies to occur this winter.
“There is absolutely no question of the lights going out or people being unable to heat their homes. There will be no three-day working weeks or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided.
“While we are not complacent we do not expect supply emergencies, this is a very important point. This is not a question of security of supply.
“The Great British UK gas system has delivered securely to date and is expected to continue to function effectively with a diverse range of supply sources and sufficient delivery capacity to more than meet the demand.”
He added: “The UK also benefits from an excellent relationship with Norway, one of our most important and reliable energy partners and that delivers nearly 30% of our total gas supply.
“Just in the last half hour I was privileged enough to speak to the Norwegian energy minister and to welcome the announcement from Equinor today that gas production will significantly increase from the the 1st of October this year to support the UK and European demand.”
Mr Kwarteng said the Government will “not be bailing out failed companies” as a result of the growing energy crisis.
He said the sector has seen “regular entry and exit” over the last five to 10 years. He told MPs: “The current global situation may see more suppliers than usual exiting the market but this is not something that should be any cause for alarm or panic.”
Mr Kwarteng added: “The Government will not be bailing out failed companies. There will be no rewards for failure or mismanagement.
“The taxpayer should not be expected to prop up companies which have poor business models and are not resilient to fluctuations in price.”
Mr Kwarteng said the energy price cap will remain in place.
He told MPs the Government wanted to protect customers, including vulnerable people, from “price spikes”.
He said: “We must not suddenly return to the ‘cosy oligopoly’ of years past where a few large supplies simply dictated to customers conditions and pricing.”
Shadow business secretary Ed Miliband also called on the Government to diversify the UK’s energy supply, drawing more power from renewables.
Mr Miliband said: “Above all there is not yet enough of a clear plan from Government for how we meet net zero with affordability and security. He will have read the climate change committee’s appropriate report this summer where they said it is ‘hard to discern any comprehensive strategy’.
“Isn’t it the truth that there is a direct line from delay, dither and failure to the issues we face today?”
He added: “In the midst of this crisis can I urge him (Kwasi Kwarteng) therefore to use this autumn’s net zero strategy – delayed, net zero review – delayed, and the comprehensive spending review, to finally put in place a proper plan?”
Mr Kwarteng replied that the Government had “plans and strategies galore”.