Consumers were urged not to worry about electricity shortages this winter amid fears of an energy crisis.
Hopes that companies could get large packages of support to help them weather the energy crisis this winter faded when the Treasury Department flatly denied having had talks with the economics department.
With gas prices at record highs, utilities lose “a lot of money” due to the government’s price cap designed to stop immediate bill increases for customers.
Industry leaders have given their assurances regarding concerns that people will not have electricity to heat their homes in winter.
It comes when a steel trade association warned of possible “long-term damage” to the industry.
Stephen Fitzpatrick, CEO of Ovo, told the BBC’s Andrew Marr Show on Sunday morning: “I want to reassure everyone that when it comes to consumers, there is really nothing that consumers care about when it comes to lights going out or not this winter To worry must be enough strength.
“The upper price limit protects you from the worst.”
Dermot Nolan, former CEO of Ofgem, told LBC that it was “likely” that many energy companies will go out of business.
However, he added, “But I don’t think that’s a problem. It’s not that great, but I can assure anyone who worries whether their company is going to go out or not.
“I would assure you that you will stay where you are, you will be looked after, you will be protected, you will actually be switched to another provider and your credit will be preserved.
“While it’s never good to hear about the company’s liquidation, you will be referred to someone else to take care of.
Mr. Fitzpatrick also warned that many energy companies are going to have a “hard time”.
He said: “There are a lot of companies in the market that have just emerged, there has been a lot of competition in the UK market and consumers have benefited.
“But I think in the last few years it has become too easy to enter the energy market. It’s a very complicated industry and I think some people underestimated the risks and the complexity. “
Mr Fitzpatrick said gas prices had increased 1,000% in 12 months.
On the price cap for consumers, he added, “If we buy gas and electricity on the wholesale market, energy companies are currently losing a lot of money for every unit sold.
“So if a company goes out of business and then another energy supplier takes over these customers and then has to buy this energy, it will sell it with enormous losses.”
The executive director of the Energy UK trade association said “exposed” businesses such as energy-intensive consumers and retailers will be hardest hit.
Emma Pinchbeck told Sky News’ Trevor Phillips on Sunday, “We expect more retailers to go out of business this winter. When we started we had around 50 suppliers and we expect more to disappear from the market.
“We have gone through a process of consolidation; dealers have left the market in the past few years.
“The question is how many fail at the same time and whether our mechanisms, which in this case are there for the customers, are ready for so many failures at once.
“And of course what that means for retailers on the other hand, in the spring or when prices normalize again.”
Economy Minister Kwasi Kwarteng pointed out Sunday that troubled manufacturers and energy companies would not get much more support, but said he was working closely with Chancellor Rishi Sunak to help the industry.
However, a senior Treasury source insisted on the PA news agency that no such talks had taken place, despite companies calling for help to prevent further collapses as wholesale gas prices rise.
Mr Kwarteng said he was sure the lights will stay on in the UK this winter as companies warned to cut hours to sustain themselves and industry body Energy UK warned more suppliers will collapse.
The minister guaranteed that he would keep the energy price cap for consumers throughout the winter, but said he would “not save failing utilities”.
When asked if he had reached out to the Treasury Department about subsidies, he said to Sky’s Trevor Phillips on Sunday, “No, I haven’t. We already have subsidies and it is very clear that many of them work. “
Mr Kwarteng said he could not yet determine whether a price cap would be introduced for companies, but added that there had been discussions about “what this support might look like”.
He added: “Of course I am talking to government colleagues, especially at the Treasury Department, to find a way.”
Mr Kwarteng admitted it was a “critical situation” but denied having applied for multi-billion pounds of support when asked whether he was considering a corporate price cap or a winter package.
He told the BBC’s Andrew Marr Show, “I haven’t asked for billions, we have plans in place. I am working very closely with Chancellor Rishi Sunak to get us through this situation. “
Whether the Federal Chancellor or his department were involved in the talks, however, was highly controversial.
A senior Treasury source told the PA bluntly, “The Treasury Department was not involved in any talks.”
With Boris Johnson going on vacation, Labor accused the government of “having deposed” her while she was “in a crisis it had created”.
Shadow Treasury Secretary Bridget Phillipson said: “The Prime Minister has gone on vacation, no one knows where the Chancellor is and this morning we learned that the Economy Secretary has entered the realms of the imagination.”
Some Tory MPs are among those calling for additional aid to energy-intensive industries like steelmaking during the crisis.
At a meeting with industry representatives on Friday, Mr. Kwarteng was confronted with demands for a “winter package of measures” to prevent further interruptions in the supply chain.
Marr told Mr. Kwarteng that it sounded like he could provide extra help to energy intensive industries.
But the cabinet minister replied: “No, that doesn’t sound like yes at all. We already have support and we’re trying to see if that’s enough to get us through this situation. “
UK Steel General Manager Gareth Stace warned the government that failure to act “may damage the future of the steel industry in the long term”.
“On the way into the winter months, rising prices could lead to prolonged downtime, damage to equipment, loss of export opportunities and market share domestically, and loss of talent and jobs,” he added.
Emma Pinchbeck, CEO of Energy UK, warned that “exposed” businesses like energy-intensive consumers and retailers will be hardest hit.
“We expect more retailers to go out of business this winter,” she told Philips.
“The question is how many fail at once and whether our mechanisms, which in this case are there for the customers, are equipped for so many failures at once.”
Urged if he was absolutely sure that the lights would stay on this winter, the Minister of Economic Affairs replied: “Yes, I am.”
Meanwhile, Gareth Stace, UK Steel’s general manager, said: “Right now, energy prices for UK steelmakers are five times higher than last year’s average, in addition to notable price volatility.
“Because of this, longer and more frequent production breaks are becoming a reality for some UK steelmakers.
“These circumstances are simply not sustainable for the industry. We call on the government to take action, as has been done in Italy and Portugal, to support the sector.
“Failure to do so could damage the future of the UK steel industry in the long term.
“At the beginning of the winter months, rising prices could lead to longer downtimes, damage to equipment, loss of export opportunities and domestic market shares, as well as the loss of talent and jobs.”
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