Yesterday, energy companies Centrica (the owner of British Gas), Scottish Power and EDF were invited to a meeting with Business Secretary Kwasi Kwarteng, and the Chancellor of the Exchequer Nadhim Zahawi. They also met with Prime Minister Boris Johnson who was a last minute attendee, not originally scheduled to be at the meeting. The Government Ministers asked the Energy Company Representatives to “do something” about the unfolding catastrophe being caused by the huge price rises in wholesale energy markets. The Chancellor warned that record profits were being “looked at”, but one industry source briefed on the talks said it was “clear the windfall tax is not a preferred option for anyone – ministers or electricity companies”.
The Government is facing increasing criticism in the media from figures such as Gordon Brown and Martin Lewis warning of the dire consequences of millions of people falling into fuel poverty this Winter. There is also the case of hundreds of thousands of small business who are not protected by the energy price cap, and are already paying prices such as 70p per KWh with £3 daily standing charges. Many of these small business owners have already thrown the towel in and walked away, but there will be thousands more closures happening in the not too distant future. Neither of the two candidates for Prime Minister has a plan to reduce the unit price of electricity and that is a serious omission, because it’s the rising price of energy that has drive inflation to 11.8% as measured by the Retail Prices Index. The energy price cap is set to rise by 80% from October and this will probably drive inflation higher to around 15% RPI. Cutting the unit price of electricity and gas will cut inflation, so it must be priority number one.
So, could Boris Johnson call a National Emergency? There’ll be another meeting today with other major energy providers, but the outcome will probably be that “nothing more can be done”. In a statement after today’s meeting, Boris Johnson said it would be “a difficult winter for people across the UK” and that the government “will keep urging the electricity sector to continue working on ways we can ease the cost of living pressures and to invest further and faster in British energy security”. The energy sector in UK needs to be sorted and fast, and Johnson could make it his mission if he wanted to. He could call a National Emergency, cancel the leadership election and take up the reins of power once more. He could force the energy companies to reduce unit prices by threatening to tax them up to 100% if necessary. He could offer loans to energy companies that are struggling and nationalise energy companies that refused to play. The National Emergency unfolding in the UK could be Johnson’s finest hour if he has the courage to take it on. The opposition to this move would be great, but, it is still in the Prime Ministers power to call a General Election, and, considering the fact that Starmer has rejected plans to nationalise industry, Johnson could win another landslide for himself. Cometh the hour, cometh the man.