The UK’s biggest energy firms have agreed to “work closely” with the Government to offer more support for struggling households as bills soar this autumn, it was announced on Thursday.
It comes after Prime Minister Boris Johnson unexpectedly joined Nadhim Zahawi and Business Secretary Kwasi Kwarteng for talks with the bosses of energy companies in Downing Street.
Although no details of any plans for future financial support were given, Mr Zahawi said that the leaders of the companies present agreed “in the spirit of national unity” to work with the Government “to do more to help the people who most need it”.
Following the meeting, Mr Johnson urged the energy giants to work on more ways to support people as energy bills are forecast to rise to over £3,500 a year from October, and £4,266 in January, partly caused by gas supply shortages triggered by the war in Ukraine.
Mr Johnson said: “Countries around the world are feeling the impact of Putin’s damaging war in Ukraine. We know that this will be a difficult winter for people across the UK, which is why we are doing everything we can to support them and must continue to do so.
“Following our meeting today, we will keep urging the electricity sector to continue working on ways we can ease the cost of living pressures and to invest further and faster in British energy security.”
Mr Zahawi added: “We have already acted to protect households with £400 off energy bills and direct payments of £1,200 for 8 million of the most vulnerable British families. In the spirit of national unity, they [the companies] agreed to work with us to do more to help the people who most need it.”
The Government has said it won’t make a significant intervention to help struggling households until the contest to become the next Tory leader and Britain’s new Prime Minister is concluded in early September.
But anti poverty campaigners and opposition politicians are urging Mr Johnson and Mr Zahawi to act now to avert what former Labour PM Gordon Brown has called a ticking financial timebomb.
Tory leadership contenders Rishi Sunak and Liz Truss are also under growing pressure to set out how they will tackle the looming crisis as British households face their biggest drop in living standards since records began 60 years ago.
According to a readout of Thursday morning’s meeting, which involved executives from 15 energy companies including E.on, National Grid and EDF, Mr Zahawi told the firms that the Government “continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take”.
Energy giants including Centrica, BP and Shell have faced criticism for reporting unprecedented profits partly fuelled by rising oil and gas prices while people face an eye watering rise in the cost of fuel and energy.
Some politicians are calling for the government to extend or review the 25 per cent windfall tax on energy companies inposed by former chancellor Mr Sunak in May, althoughofficials said no decision can be taken until a new Prime Minister is in office.
The executives were also told that the energy market is not always functioning for consumers, and extraordinarily high bills will ultimately damage energy companies, the readout added.
Mr Kwarteng has launched a consultation on energy market reforms aimed at delivering lower prices for consumers while the energy firms were also encouraged to invest more in North Sea oil and gas, renewables, biomass and nuclear to strengthen the UK’s energy sector.
