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The cost of rescuing failed energy firms' customers is set to be passed on to every household through a levy on bills, the Business Secretary has indicated.
The wholesale price of gas has risen six-fold in a year, meaning most energy companies are now making a loss on every customer on their books.
Regulator Ofgem is raising its cap on annual bills by £139 to £1,277 from next month – but the actual cost of supplying a year's gas and electricity is now estimated at around £1,600.
Seven energy firms serving a total of 1.5million customers have gone bust in recent weeks. Many more could follow, with the total number of suppliers potentially falling from 70 at the start of the year to as few as ten.
Bigger firms such as British Gas and EDF have been put under pressure by the Government and Ofgem to take on customers from failed firms.
The cost of rescuing failed energy firms' customers is set to be passed on to every household through a levy on bills, the Business Secretary has indicated
The wholesale price of gas has risen six-fold in a year, meaning most energy companies are now making a loss on every customer on their books
It was reported earlier this week that ministers were looking at providing loans, grants or subsidies which would allow them to cover their losses.
However, Business Secretary Kwasi Kwarteng made clear that this would not happen. As a result, households are now likely to face an extra levy on their bills under Ofgem's existing system for covering losses at firms taking on failed rivals' accounts,
Yesterday also saw Paul Scully, the small business minister, admit that Ofgem and the Government were having 'conversations' about raising the energy cap again in the spring, should gas prices remain high beyond a 'short spike' as global economies reopen after months of lockdown to combat Covid.
Mr Kwarteng told MPs that the Government would neither bail out failed energy firms, nor offer grants or
