Gas crisis 'could cause three-day-week' amid more emergency talks

Ministers were warned that they must act to keep the 'lights turned on' today amid fresh crisis talks over gas shortages - with taxpayers facing pumping billions of pounds into stricken energy firms.

Fears are mounting about the consequences of soaring wholesale gas prices - up 70 per cent since last month - that are sending providers to the wall and causing chaos for a range of industries.

Experts say that as well as spiralling bills for household energy, food supplies and even medical procedures are at risk as the pressures cause shockwaves across supply chains. One consultant said the problems are so huge they could 'easily see a three-day working week' across affected companies this winter. 

And Iceland boss Richard Walker told the BBC this morning that he was 'shocked' by how exposed the UK was to disruption. 

'This is no longer about whether Christmas will be OK,' he said. 'This is more about keeping the wheels turning and the lights on so we can actually get to Christmas.' 

Business Secretary Kwasi Kwarteng is expected to hold more discussions with the energy industry amid calls for bailouts. Five energy suppliers have gone bust recently, and there are reports that customers of those on the brink of collapse could be temporarily transferred to another company.

The Government could provide a loan to other firms taking on their customers, or even effectively nationalise small suppliers on the verge of collapse by appointing a 'special administrator'.

Other options include creating a 'bad bank' to take control of firms that can no longer operate on their own. 

The UK's sixth largest energy company, Bulb, was among those seeking help today. 

Boris Johnson, who is at the UN general assembly in New York, insisted the problem should be 'temporary'. 

He said the energy squeeze was a result of the 'world waking up from pandemic shutdown like everyone ''going to put the kettle on at the end of the TV programme''. 

Foreign Office minister James Cleverly said he was 'not going to speculate' over whether the Government would step in to support energy businesses.

Mr Cleverly told Sky News the Business Secretary had held meetings with industry players which had been 'very productive'.

Asked whether energy companies could be bailed out, Mr Cleverly said: 'I'm not going to speculate as to exactly how we address this, but we've moved quickly and the Business Secretary of State's already had a series of meetings about this both last week, and over the weekend, and we've got a very clear idea of what our priorities need to be in terms of protecting consumers and protecting the security of our energy supply.'

Pushed on whether he was therefore not ruling it out, he added: 'We are considering a range of options.' 

In the past month, five suppliers have already been forced to close and analysis by business management consultants Baringa shows that 39 suppliers could also collapse in the next 12 months, The Times reports. 

Bulb, an energy provider to 1.7 million customers in the UK, is among the suppliers seeking a bailout amid pressure on the industry.

On Saturday, Mr Kwarteng held talks with energy suppliers on and their regulator Ofgem amid fears dozens of companies could go to the wall.       

Today, the country's biggest power firms, including Eon and Centrica, will also call on business secretary to help Britons by removing the cost of green subsidies from payments.  

Last night there were growing fears of gaps on supermarket shelves as ministers failed to achieve a breakthrough in talks over shortages of carbon dioxide (CO2). 

Record gas prices have led to two of the country's largest fertiliser plants pausing production.

The sites in Teesside and Cheshire, which are run by US firm CF Industries, produce around 60 per cent of the country's CO2 as a by-product from the manufacture of fertiliser. 

The gas is vital to the supply of food and is needed by hospitals and the nuclear industry. 

It is used as a preservative in fresh food packaging and in the transport of frozen goods – in dry ice form. It is also used to stun chickens and pigs prior to slaughter. 

Mr Kwarteng yesterday held talks with CF Industries boss Tony Will in a bid to persuade him to restart production. 

But Mr Will, who flew into the UK from the company's headquarters in Illinois, said it was not commercially viable while gas prices remain high. 

Whitehall officials were last night drawing up possible options to incentivise the firm to restart production ahead of further talks in the coming days.

Mr Kwarteng will today host a round table with the energy industry and consumer groups over concerns about the domestic supply of gas and electricity.

Ministers fear more small power firms could go bust within days – five have already in collapsed in recent weeks. 

The Business Secretary yesterday finalised contingency plans for what will happen if more suppliers cease trading.

There are concerns that energy regulator Ofgem may be unable to find companies willing to take over customers' accounts if gas prices continue to rise.

If this happens, the Government will step in to take over the running of a collapsed firm until it can be rescued or customers moved to a new supplier. 

The bosses of some of the biggest energy companies will use their meeting with Mr Kwarteng to urge him to get rid of green levies in customers' bills.

Eon UK boss Michael Lewis wants the renewable energy subsidies to be funded through general taxation instead. 

He has said that removing such additional costs is a 'short-term imperative' to help consumers during what is 'going to be a very challenging winter'. 

British Gas owner Centrica has backed his calls. 

Ministers last night sought to reassure the public there was no imminent threat to power supplies. Government climate change chief Alok Sharma told Sky News: 'The clear message that is coming out of this is that there is no immediate concern in terms of supply. 

'We don't see any risks going into the winter. People should be confident that the supplies will be there and that we will be protecting them in terms of price rises. But of course we are not complacent about this.'

Asked about possible problems with food supply, Mr Sharma told Times Radio: 'The Government is working very hard on all of this... We want to ensure there are not disruptions when it comes to food on shelves and in terms of CO2 available in hospitals and other places. 

'It's very important to underline the fact that we do feel that there is a security of supply at this point in time. 

'We're not expecting any change in that.' 

Mr Kwarteng last night said he had been assured by Ofgem boss Jonathan Brearley there were 'well-rehearsed plans in place to protect the market and consumers'. 

In a series of tweets, the Business Secretary wrote: 'I understand this will be a worrying time for businesses and consumers. 

'We are working hard to manage the impact of global gas price rises.

'Unfortunately, small energy suppliers are facing pressures due to sudden increases in global gas prices... If a supplier fails, Ofgem will ensure customers' gas and electricity supply will continue uninterrupted. Our priority is to protect consumers.

'If a 'supplier of last resort' is not possible, a special administrator would be appointed by Ofgem and the Government. 

The objective is to continue supply to customers until the company can be rescued or customers moved to new suppliers.'

Mr Kwarteng said he and Mr Will had 'explored possible ways forward to secure vital supplies, including to our food and energy industries'. 

Time for our leaders to stop being so naïve about energy 

 By Alex Brummer for the Daily Mail

The prospect of Christmas without turkeys and families shivering in their badly insulated homes is hardly an alluring one.

But with Russia playing hardball with natural gas supplies to Europe and the power links between France and Britain temporarily disabled by fire, it finally should be dawning on our politicians that as worthy is Britain's dash to be the G7's greenest economy may be, our current system of energy supply is woefully ill-equipped to cope with the transformation.

Business Secretary Kwasi Kwarteng is trying to cobble together a temporary rescue plan for the food supply chain and gas supplies.