Today: Govt to hold emergency talks with energy chiefs as anger over spiralling energy bills rises
Energy bosses will meet with the Government today to discuss how they can ease pressure on consumers facing record household bills.
Downing Street confirmed the meeting will feature electricity producers and suppliers, including renewable generators and utility companies.
This will include discussions on how energy companies can mitigate soaring wholesale costs and also voice their views on energy market reforms.
A Government spokesperson told City A.M.: “We are engaging with the electricity sector to drive forward reforms and to ensure the market delivers better results for people across the UK. In the meantime, and as we announced in May, the government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take.”
Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng are also expected to attend.
While media reports initially suggested North Sea oil and gas operators would also be in attendance, industry body Offshore Energies UK has confirmed they will not be at the meeting.
The Government refused to comment on whether expanding the windfall tax to electricity generators would be discussed.
However, City PM understands the Government wants to work constructively with the companies, and that firms are not being summoned for a dressing down from Whitehall.
A Treasury source said: “This Chancellor starts from the position that business is a good thing and that providing reliable energy is an amazing service, so instead of shouting at these companies, we want to work with them to help Brits through these difficult times.”
Energy Profits Levy
The Energy Profits Levy is an announced 25 per cent further tax on the profits of North Sea oil and gas operators, alongside the 40 per cent special corporation tax rate they already pay.
Former Chancellor Rishi Sunak hoped to generate £5bn this year from the measure, which would help fund his £15bn support package for households.
However, this package was announced in May, and since then forecasts for the price cap this winter have climbed from £2,800 per year to over £4,000 per year.
This follows Russian retaliation to Western sanctions, throttling supplies into Europe, and continued conflict in Ukraine.
Multiple consultancy groups including Cornwall Insight, Auxilione, BFY Group and Investec have also predicted painful hikes this winter – with prices already at a record £1,971 per year.
The urgency of the situation been expressed across the energy sector.
Utilita Energy’s chair Dereck Lickorish described the situation as “absolutely dire” and called for both Tory leadership contenders Sunak and Liz Truss to work together on resolving the crisis.
He told BBC’s Radio 4 Programme: “We have to do something very profound, we have to do it quickly because all the time we’re sitting here the clock is ticking and the price of gas keeps on increasing.”
The energy firm has been calling on the Government to bring in a social tariff to ease earning bills.
Meawnhile, Octopus boss Greg Jackson also described the current packages of support as “insufficient.”