No 10 dismisses ‘alarmist’ warnings of lights going out amid energy crisis talks | Supply chain crisis

No 10 has brushed off the idea that there could be a winter of discontent with energy and food shortages over Christmas, saying the UK is “highly resilient”.

With the government locked in talks with energy suppliers about the rising cost of gas and many firms struggling to stay afloat, Kwasi Kwarteng, the business secretary, said there was “no question of the lights going out”.

“There will be no three-day working weeks or a throwback to the 1970s,” he said. “Such thinking is alarmist, unhelpful and completely misguided.” He also insisted the energy price cap to protect consumers from sharp rises in bills “will remain in place”.

However, households are already facing a rise of 12%-13% in the cap – an average of £139 – this October, and there is no guarantee that it will not rise further next year in response to the global gas price shock.

Ed Miliband, the shadow business secretary, said many people were facing a “triple whammy” from rising energy costs, the national insurance hike, and a cut to universal credit.

The high price of gas has forced some CO2 producers to shut down, leading the meat industry to warn that there could be shortages in the coming months because the gas is needed for humane slaughter, stunning, packaging and refrigeration.

However, Johnson’s spokesman insisted the UK would not fall victim to any food shortages, despite poultry producers raising the alarm that there may not be enough turkeys and other meat for Christmas.

“We’ve got a highly resilient food supply chain in the UK, we’ve seen that throughout the pandemic, and we will obviously continue to work with industries that are facing issues to ensure that remains the case,” he said. “We will consider any contingency plans as appropriate.”

Downing Street was asked if there was a plan to help CF Industries, the UK’s biggest supplier of CO2, reopen two large fertiliser plants in Teesside and Cheshire, which produce CO2 as a byproduct.

The spokesman said: “We have a highly diverse source of supplies but, as I say, Kwasi Kwarteng has spoken to the company involved over the weekend and will consider any contingency plans as appropriate.”

Kwarteng said he was still discussing the options for addressing the stoppage of CO2 production as well as being in negotiations with energy companies, with many smaller ones at risk of failure.

One option is providing emergency loans to energy companies that take on the customers of failed suppliers. But Kwarteng also did not rule out the idea of a state-backed supplier – an idea floated by the Liberal Democrats – even though he said he wanted to “avoid” that as an option.

James Cleverly, a Foreign Office minister, also stressed the UK’s resilience when asked about the financial strain that could be caused by the sharp rise in gas prices combined with the effect of the planned cut to universal credit.

He told BBC Breakfast: “The UK economy has shown itself to be resilient. We now have vacancies in the job market, which means employers will have to offer more to fill those vacancies or retain members of staff who might otherwise move to job offers that are out there.

“That will have the good old-fashioned supply-and-demand curves, there’s an increase in demand, that will mean that wages should rise. Ultimately, of course, that is the healthy, sustainable way of making sure that people have good, decent pay packets, and that’s through employment.

“It’s absolutely right that we make sure that we match vacancies to people seeking work and watch the natural phenomenon – supply and demand phenomenon – of increasing wages through the UK economy.”

Pushed on whether the universal credit uplift would therefore be kept, he said: “It was always meant to be temporary, and it’s really important that temporary measures are temporary, because if every single response like an uplift on universal credit had to be permanent it would massively limit the flexibility and agility of governments in dealing with one-off events like the coronavirus pandemic.”




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