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Tory MPs joined with Labor and industry leaders in calling for support for heavy industry as energy costs soar.
Gas prices have risen 250% since January, and while households are partially shielded from this increase by the price cap, customers are expected to experience massive increases in the spring.
Energy companies have warned that supplier bankruptcies could lead to higher household costs, as they called the price cap “not fit for purpose” and “too good to be true.” Paul Richards, managing director of Together Energy, which he says is currently losing money, told BBC Radio 4’s Today program: “Price caps as a mechanism are not suitable for the industry, nor to customers.
“When the reverse situation arises and the wholesale price begins to drop sharply, the price that will be passed on to customers in April may seem like a very, very bad deal, whereas at present the cap on prices. price sounds like too high a price good to be true.
He said that even if the cap protects customers in the short term, failed suppliers will mean businesses and households will then be burdened with costs between £ 1 billion and £ 3 billion.
It comes after Business Secretary Kwasi Kwarteng held a meeting with leaders from energy-intensive industries, including representatives from the paper, glass, cement, lime, ceramics, chemicals and steel, although it is understood that the talks failed to produce a solution to the crisis.
The Chairman of the Energy Intensive User Group (EIUG), Dr Richard Leese, said he welcomed the opportunity to meet with Kwarteng. Leese said he proposed three technical solutions at the meeting, asking the government to consider cost containment measures, distribution of network costs and emergency measures to “prevent lasting damage to factories and to very expensive equipment “if a plant has to close quickly. .
Conservative MPs have also joined in calls for the government to intervene in the general crisis. Andrew Bridgen, the Conservative MP for North West Leicestershire, has said he will support government intervention to provide short-term support to energy-intensive industries. “However, what we need (…) is a long-term sustainable energy policy based on various sources of supply,” he told the BBC.
The issue was also raised by Conservative MP Miriam Coates, who called on ministers to consider options to save the steel industry, which she said was “at serious risk” due to “acute” energy costs. Meanwhile, Jo Gideon, Tory MP for Stoke-on-Trent Central, told the BBC that “potters, bricklayers and materials scientists” also need government support.
After Friday’s meeting, industry leaders compared the UK government’s failure to alleviate the crisis with the stance taken by European governments. UK Steel boss Gareth Stace told Channel 4 News: “What we’re asking Kwasi Kwarteng today on wholesale pricing is just to step in, to ease that pressure in the short term, just like in Portugal or Italy, for example. Their governments are already investing billions of euros to help their industries and the UK government has yet to do anything.
The crisis comes as ministers plan to impose new gas royalties, with The Times reporting that a new strategy will be released ahead of next month’s Cop26 climate conference. The strategy would see the price of electricity fall while household gas bills could rise by £ 170 per year.
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