Labour says government 'underplaying' energy crisis as Kwarteng guarantees winter supply
October 7, 2021 - Stefan Boscia
Labour is accusing the government of “underplaying” the energy price crisis as Kwasi Kwarteng today vowed the UK has enough supply to last through winter.
Shadow business and energy secretary Ed Miliband today said the amount of energy companies going bust “is not a normal course of events”, despite claims from Kwarteng, and that “we are massively exposed as a country to global price surges”.
Natural gas prices hit record highs early yesterday, before plummeting after Vladimir Putin said he would ramp up gas supplies to Europe.
November natural gas futures contracts scaled to a record high of 404p per therm, the first time they have ever breached the £4 mark. In the last year alone, prices have risen by nearly 1,000 per cent.
But after a 30 per cent explosion in early trading, the price fell back to below yesterday’s close driven by Putin indicating he would consider “possibly increasing supply in the market” by increasing gas supplies through Ukraine.
Russia has decreased its gas supply to Europe in recent months, contributing to global energy price hikes, with many claiming it is a political strategy to put pressure on the West and ensure the Nord Stream 2 pipeline to Germany is approved.
Nine UK energy firms went bust last month alone after not hedging for price increases, while there are also concerns about supplies.
Kwarteng told an Energy UK conference today that he was confident the country will have enough energy supplies to get through winter.
“The UK so far, as many of you know, has made great progress in diversifying our energy mix. But we are still very dependent, perhaps too dependent, on fossil fuels and their volatile prices,” he said.
“Relying on homegrown power generation will protect consumers from gas price fluctuations.
“And it will, in the long run, bring down bills, we will use the wealth of Britain’s natural resources to deliver cleaner, cheaper power.”
The energy price cap increased to £1,277 a month on 1 October – a 12 per cent increase – which will mean more expensive bills for many.
The increase is contributing to a cost of living crisis, which has also been spurred on by above average inflation.
Miliband told Sky News that the crisis has been exacerbated in the UK by the government’s unpreparedness.
“We have very little gas storage, we’ve stalled on some of our renewables programme, on nuclear, and we haven’t taken the steps needed to improve energy efficiency,” he said.
Some firms are calling for the energy cap to be taken away so they can raise prices more closely in line with increases on the global market.
When asked about this prospect, Miliband said: “The answer is not to take the cap away, the answer is to move further and faster on the net-zero carbon agenda…to make us less vulnerable, less exposed to the international gas market. If we took the cap away things would be worse than they already are for consumers.”