Energy boss: Families face two years of bills misery
STRUGGLING households face two years of punishing energy bills, the boss of Britain’s biggest supplier has warned.
British Gas parent firm Centrica says a move away from coal has driven a surge in global demand for gas with a resulting six-fold rise in wholesale prices.
The company’s chief executive Chris O’Shea said gas had now become a ‘big transition fuel’ as the country moves towards net zero.
As a result, he warned, high prices – and the cost of living crisis – could run for two years.
‘As you turn off coal-fired power stations in other countries, there isn’t an abundance of gas that you can just turn on quickly,’ he added. The current cap on energy tariffs of £1,277 for a typical household is expected to rise by £700 in April, taking it towards £2,000 a year.
Industry analysts warn that without government action the figure could go up again in October, bringing a winter of misery next year and beyond.
There have been calls from some Tory MPs to tear up pledges to cut greenhouse gas emissions and push for Britain to invest in new North Sea gas and oil production.
Mr O’Shea threw cold water on the idea, suggesting that this would not bring down bills.
‘I’m not sure an increase in UK supply would have brought the price down from £3 a therm, as it was in December, from 50p as it was a year ago,’ he said.
‘We bring gas in from the United States, from Norway, from Europe, from Qatar, from other places. So we’re not in a position to simply have the UK as an isolated energy market. We are part of a global market.’
The Government is currently considering a range of options to protect families, pensioners and others. These include cutting the 5 per cent VAT on energy bills and shifting green levies to general taxation. Together these could reduce bills by around £200.
Separately, there is pressure to raise the Warm Homes Discount on bills, currently worth £140, to more households receiving benefits.
Labour has argued for a windfall tax on North Sea oil and gas giants, such as BP and Shell, to raise billions to help fund support for families, but this has been ruled out. Energy supplier Ovo caused outrage this week when its SSE Energy Services subsidiary suggested people might try to avoid high bills and keep warm by doing star jumps or hugging their pets.
Its boss, Stephen Fitzpatrick, yesterday apologised, saying it was a ‘mistake’, ‘unhelpful’ and ‘upsetting’.
Speaking to the BBC, he called for the Government to cut green levies and social costs on energy bills.
He said: ‘What we have in our energy bills today (is) not only VAT, but also a whole bunch of environmental and social costs that the poorest in our society are paying the highest proportion towards. If we paid for them through general taxation, we could ensure the wealthiest in society shoulder the biggest burden. It’s something that the Government could do today.’
‘Can’t just turn on gas supply quickly’