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‘HARD WINTER AHEAD’ AS GAS CRISIS GROWS

» ENERGY AND FOOD COSTS RISE — ALREADY SOME SHELVES ARE BARE

Nicholas Cecil, Jonathan Prynn and Oscar Williams-Grut

MILLIONS of families face a “very difficult winter” as prices rise, energy bills go up and cuts to universal credit hit, a Cabinet minister admitted today.

Business Secretary Kwasi Kwarteng also told how the Government is braced for many more than eight energy firms to go bust within weeks, forcing millions of customers to be transferred to new suppliers.

He was open about the financial squeeze facing many as the ditching of measures brought in to protect them during the pandemic coincides with rising inflation and higher energy costs.

Asked if axing the £20 boost a week to universal credit should be rethought, Mr Kwarteng told LBC Radio: “I fully appreciate that it’s going to be a difficult time.

“We have got very high prices, particularly in energy, and my job is to try to protect consumers as best as I can from those high prices. That’s why I’ve said we are going to keep the energy price cap.”

However, this price cap, following a review in August, is already set to rise. From October 1, those

on default tariffs paying by direct debit face an increase of £139, rising from £1,138 to £1,277.

Prepayment customers will see a higher increase of £153, taking their annual bill from £1,156 to £1,309, according to Ofgem data.

The £20 uplift to universal credit will also officially end on October 6, with some receiving their last payment at the end of the month.

It came as a food industry chief warned that shoppers will start noticing shortages within days as a result of the crisis in carbon dioxide supply.

Ian Wright, head of the Food and Drink Federation, said consumers could start noticing shortages in poultry, pork and bakery products within days.

CO2 is used in food packaging and as a method of stunning animals prior to slaughter but supplies are running low.

The spiralling energy costs have led to the suspension of operations at fertiliser plants, which produce CO2 as a by-product, having a knock-on effect on the food industry.

Adam Scorer, chief executive of fuel poverty charity National Energy Action, said: “This is the toughest start to an autumn that I can remember. This toxic cocktail of challenges will leave millions of households struggling to cope.”

The Resolution Foundation think tank said some 4.4 million households on universal credit are poised to see their energy bills rise significantly in October, the same month they will typically lose more than five per cent of disposable income as the uplift ends.

The furlough scheme is also being withdrawn at the end of this month.

Appearing on BBC Breakfast, Mr Kwarteng was asked about the worries for families who may be choosing between heating their homes and putting food on the table.

He said: “There are mechanisms in

place now to protect consumers. We’ve got the warm home discount, we’ve got winter fuel payments, which are again focused on the most vulnerable.

“We’re focused on helping vulnerable customers through winter, particularly with regard to energy prices.”

Pushed on the issue of universal credit, he said: “It’s a difficult situation, it could be a very difficult winter.”

There were also no signs of the gas crisis easing. The UK’s day ahead gas prices surged to 184p per therm this morning, almost four times the price paid at the end of March.

In other developments:

⬤ Cross-Whitehall talks were taking place on how to end the threatened escalation in CO2 shortages which could severely disrupt the food chain.

Mr Kwarteng said he was “confident” of a resolution within days. He has held talks with fertiliser firm CF Industries, which has suspended operations because of the high cost of energy.

⬤ Mr Kwarteng was this afternoon holding round-table talks with small energy suppliers, amid warnings that dozens could go under by the end of this year.

He insisted customers of firms which go bust should be able to find energy pricing very much in line with their old tariff, however, other experts warned some could see bills rise by several hundreds of pounds.

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