An industry leader has warned the Government that factories across the country could stop production due to rising energy costs.
Andrew Large, director-general at the Confederation of Paper Industries, attended a meeting on Friday with the Business Secretary and other representatives of energy intensive industries to discuss the wholesale gas crisis.
Speaking to the BBC Radio 4’s PM programme afterwards, Mr Large claimed it was ‘very clear’ across all of the sectors that there are ‘serious’ risks factories could stop all activities as a result of the gas prices being too high.
His comments came after the boss of UK Steel, Gareth Stace, said earlier today that if Prime Minister Boris Johnson and the Government ‘does nothing to help’ firms, rising prices could ‘start to strangle’ production. At his Conservative Party conference speech earlier this week, Mr Johnson promised that the UK would become a ‘higher-wage, higher-productivity economy’.
But Mr Stace claimed that if no action is taken, ‘we’ll actually be walking blindly towards a low wage economy’.
Amid the industry warnings, Ofgem warned there will also be a ‘significant rise’ to the cap on energy bills – hitting millions of Britain’s poorest people – with soaring energy prices set to push average annual bills through the £2,000 barrier for the first time. As the gas crisis escalated, industry analysts suggested the current energy cap of £1,277 would rise by as much as £800.
Ofgem chief executive Jonathan Brearley, didn’t put a figure on it, but said there will be a ‘significant rise’ in the price cap set by the industry regulator which helps to control the cost of gas and electricity in the UK. He didn’t knock back claims that fixed and other deals could reach £2,000 in 2022.