Monday 27 December 2021 3:13 pm | Updated: Monday 27 December 2021 3:14 pm

Energy boss calls out government inaction ahead of crunch meeting

Ofgem is mulling proposals that would limit the amount of consumer credit energy suppliers can hold, which could see £1.4bn in excess payments returned to customers. — Consumer confidence in the UK dipped to its lowest level in 11 months last month, according to research by Bank of America

The boss of Ovo Energy has called for urgent government action warning the current market structure “isn’t fit for purpose.”

It comes as the chiefs of top energy firms prepare to meet with Government Minister Kwasi Kwarteng today to discuss reforms to the sector in a bid to prevent more firms from collapsing.

A total of 26 energy firms having gone bust since August leading Ovo Energy’s boss, Stephen Fitzpatrick, to compare the current crisis to the financial crash. He likened the government’s lack of action to prevent the collapse of energy companies with the delay between the downfall of Northern Rock in 2007 and that of Lehman Brothers a year later, the Telegraph reported.

“I don’t think we’re at the end of the energy crisis right now,” he told The Telegraph, warning ministers that they must act now in order to avoid more firms from collapsing.

Last week, gas prices hit a new record above 450p per therm which experts think could take average annual bills to about £2,000 next year.

With a price cap in place to prevent energy companies from passing rising costs on to customers Fitzpatrick argued that the market structure is crippling the industry.

“The way things are at the minute everybody’s losing, because the market structure as it is isn’t fit for purpose. We simply haven’t seen any action from the regulator or from the Government to address that,” Fitzpatrick told the Telegraph.

The government has defended the use of a price cap to ensure that consumers are protected against record gas prices globally. In comments to City PM a spokesperson for the government confirmed that meetings between Kwasi Kwarteng with the energy industry are ongoing.

The spokesperson confirmed that the Business and Energy Secretary today met with representatives from large energy suppliers and Ofgem to “discuss the ongoing effects of record high global gas prices on the sector.” “Throughout the meeting there was discussion of the issues facing the sector and an agreement for meetings to continue over the coming days and weeks to ensure UK consumers are protected,” the spokesperson added.