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And amid rising concerns over looming food shortages the Government last night struck a deal with fertiliser firm CF Industries to restart production at its UK sites.
The move will help ensure availability of carbon dioxide vital in the food chain and health service.
The Prime Minister yesterday said the panic about a surge in fuel prices driven by global shortages of liquefied natural gas was “not justified”.
And he promised his Government will do “whatever we can” to address the supply problems in the industry.
Mr Johnson said: “Christmas is on,” in response to claims that a cost-of-living squeeze could leave many households overstretched this winter.
Ministers are resisting demands from gas suppliers for the Government’s cap on energy price rises to be scrapped because of the crisis in the industry.
A string of smaller gas providers have ceased trading in recent weeks as supply problems have intensified.
Mr Johnson, in the US for talks with President Joe Biden, spoke out to calm fears about the price surge.
Asked if he accepted people will struggle this winter, the Prime Minister said: “No, because I think this is a short-term problem caused by the energy problems, the spikes in gas prices.
“And like many of the other supply issues we are seeing, including food…are caused by the world economy waking up after a long time in this suspended animation caused by Covid.
“We will do whatever we can to address the supply issues but this is a short-term problem.”
Asked about concerns surrounding rising bills, food shortages and threatened job cuts, he said: “I really don’t think that is justified.”
Mr Johnson said the Government was “talking to the energy companies, doing what we can to keep prices low” to make sure that the supermarket shelves aren’t empty.
He added: “We have very, very good supply chains in the UK.”
And he suggested “the market across the world is going to start clearing these problems” in energy prices and “they will they will rectify themselves”.
Earlier, Business Secretary Kwasi Kwarteng insisted” “There are mechanisms in place to protect consumers.
“The energy price cap is staying even though some energy companies I read today are asking for it to be removed. I’ve been very clear that that’s staying, so we’re protecting customers there.
“We’ve got the Warm Home Discount, we’ve got Winter Fuel Payments, which are again focused on the most vulnerable customers.
“So, we’re completely focused on helping vulnerable customers through this winter, particularly with regard to energy prices.”
In response to claims that the removal of a temporary £20-a-week increase in the Universal Credit welfare benefit could add to the squeeze on some families, he said: “It’s a difficult situation. It could be a very difficult winter. That’s why, as Energy Minister, I’m very focused on helping people that are fuel-poor. ” Speaking at departmental questions in the Commons, he told MPs: “Protecting consumers is our primary focus and is shaping our entire approach to this issue.They must come first.”
Yesterday CF Industries agreed a deal with the Government after the US firm halted production at its fertiliser plants at Billingham on Teesside and Ince in Cheshire last week because of a surge in gas prices.
But it could take as long as three days for the factories to start producing carbon dioxide again.
The halt in production plunged the food industry into chaos because CF Industries produces 60 percent of the UK’s CO2.
The Government will pay towards the higher energy costs involved in producing the gas, according to reports.
CO2 is used across a host of sectors, including in the NHS and the food supply chain.
It is injected into the packaging of perishable foods such as meat and salads to inhibit the growth of bacteria, typically prolonging the shelf life of products such as beef steak by around five days. The gas is also used to stun animals prior to slaughter, and is deployed as a coolant for medicines and vaccines in the NHS – and likewise in nuclear programmes.
The Department for Business, Energy and Industrial Strategy said it is not yet in a position to confirm all the details of what has been agreed with CF Industries.
The BBC reported Mr Kwarteng has approved a letter of indemnity which agrees the Government, for a time-limited period, will pay the extra energy costs involved with starting production back up in Teesside and Cheshire. The broadcaster said the CF Industries deal has been drafted so that is an exclusive offer to the US-owned company.That means other companies who stop production due to high commodity prices will not be able to ask the Government for similar assistance.
The State will provide limited financial support to cover operating costs for three weeks to allow the market to adapt to global gas prices.
Mr Kwarteng said: “This agreement will ensure the many critical industries that rely on a stable supply of CO2 have the resources they require to avoid disruption. The quick and decisive action we have taken to resolve the issue shows the seriousness with which we have approached it.
“In our ongoing response to manage the impact of global gas price rises, we will continue to protect businesses and consumers.”
Environment Secretary George Eustice said: “We have acted decisively to ensure CO2 supplies, which are critical to some of our food sectors, continue to be available following exceptional events.
“However this is a short-term intervention to provide the space and time for market adjustment.”
The agreement came hours after the Food and Drink Federation warned that the UK had just 10 days before consumers saw food shortages on shop shelves.
Its chief executive Ian Wright said shoppers could start noticing a lack of poultry, pork and bakery products on shelves in days.
He added “We have been saying for several weeks now that the just-in-time system which underpins both our supermarkets and our hospitality industry is under the most strain it has ever been in the 40 years it has been there. It is a real crisis.”
He warned that poultry and pig production would begin to suffer very seriously by the end of this week without intervention.
COMMENT BY CAROLINE ABRAHAMS
Many older people will be extremely anxious having seen reports of possible energy shortages and price hikes.
It is always hard for some to keep warm through the winter but now it seems this annual challenge for those on a low fixed income could become tougher still.
It’s vital that older people can afford to keep the heating on as the cold can make a lot of pre-existing health conditions even worse.
The uncertain market means it may not be possible or advisable to switch to a cheaper energy deal at the moment.
However, your current supplier can help if you are struggling to pay and are worried about running up debt. If suppliers are unable to stabilise bills, Age UK will certainly be calling on the Government to take action so that a problem in the energy sector doesn’t translate into a tragedy for millions of older people who can’t keep warm.
There is financial support available for during the winter. The Warm Home Discount Scheme provides £140 to older people on Pension Credit.
If you’re eligible, you should automatically receive a letter between October and December.
Those aged 66 or over this winter should also automatically receive the Winter Fuel Payment in November or December.
This is worth between £100 and £300 depending on your age, who you live with and any benefits you may receive.
If your supplier has gone bust, you will still receive gas or electricity. The energy regulator Ofgem will move your account to a new supplier but this may take a few weeks. Your new supplier should contact you to explain what is happening with your account.
In the meantime, check your current balance and – if possible – download any bills or take a photo of your meter reading.
Older people worried about their energy can contact the Age UK advice line on 0800 169 65 65 as well as look at our website and advice guides.
Our network of more than 120 local charities will be there to support them this winter.
- Caroline Abrahams is the Charity Director at Age UK
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