Four more energy firms are on brink of collapse
AT LEAST four energy suppliers could cease trading from today because of soaring wholesale gas prices, experts have suggested.
Energy regulator Ofgem was last night said to be bracing for a fresh wave of collapses this week after several firms entered its “Supplier of Last Resort” process.
This is when other gas or electricity firms take on a failed supplier’s customers, which in this case is expected to total hundreds of thousands of households.
One of the impacted firms is believed to be Pure Planet, which serves 250,000 customers.
A source told Sky News the other suppliers about to enter the “Last Resort” process have significantly fewer customers.
Nine energy suppliers went bust last month, affecting more than 1.7 million consumers.
Taxpayers’ cash will be protected when the Government finalises its bailout for industries hit hardest by soaring costs, ministers insisted.
But companies struggling with high energy bills have been warned they will not be thrown a financial lifeline by ministers if they pay shares and bonuses.
Boris Johnson is considering loans worth hundreds of millions to stop usually profitable factories going bust. State-backed loans to stop them shutting down over winter are being looked at.
But Cabinet Office minister
Stephen Barclay said the government had already provided “huge support” to business during the pandemic and any help must be value for money.
He said: “We’re keen to work with them as we bridge the pressures that they currently face. “There’s a balance here between what support to give and also protecting the taxpayer, given that we have high tax rates, that we have borrowed a very considerable sum over the last two years.
Mr Barclay said there had been “extensive engagement” with industry and that it would be for firms themselves to decide what level of support they wanted. “The first instance is for the industry themselves to respond in terms of their shareholders, their businesses,” he said.
Mr Barclay said the Government would take into account the circumstances of the firms involved.
Industry leaders warned that loans may be little more than a “flimsy sticking plaster”.
Gareth Stace, the director general of the trade body UK Steel, said without adequate support the industry faced heavy job losses with plants being forced to close as they could not afford to keep running.
He said: “The key test in this proposal is, are we now going to be on an equal footing with steelmakers in Germany?
“If this package results in us still paying 80 per cent more for energy than our competitors in continental Europe, then really this will really be a flimsy sticking plaster on what is really a major crisis.”