Minister warns of 'really difficult winter' amid rising energy costs and food shortages

Some are worried and others are terrified by rising energy bills, ITV News Political Reporter Shehab Khan reports

People in the UK will face a "really difficult winter" this year, a business minister has warned, with energy bills rising and a "real concern" about food shortages.

Paul Scully told ITV News that the UK's energy crisis, which has seen nine providers fold and resulted in more than 1.5 million customers being moved to new, likely more expensive contracts, will present a "challenge" for many Britons.

"This is going to be a really difficult winter for people," he said.

"We know this is going to be a challenge and that's why we don't underestimate the situation that we all find ourselves in".

It was a contradiction to Boris Johnson's assessment of the situation, with the prime minister telling journalists in Washington that "no", he doesn't believe it will be a tough winter because problems facing the energy industry are short-term.

But energy is not the only issue causing concern in the UK, with gas shortages causing a reduction in carbon dioxide supply - essential in food and drink production - which has led to concerns supermarket shelves are emptying.

Mr Scully accepted this is a "real concern" but he's "pleased" the government was able to strike a deal to provide one of the UK's biggest CO2 suppliers with financial support so it can restart production - however the agreement will only cover three weeks.

Prime Minister Johnson, on Wednesday, rubbished suggestions that gas prices could lead to panic buying at supermarkets this winter, saying the UK has robust food supply chains.

Minister warns of 'really difficult winter ahead':

"I don't think that will happen," he said.

"I think we've got very good supply chains, as I've been saying over the last few days, and what we're seeing is the growing pains of a global economy recovering rapidly from Covid".

But Mr Scully said there is a "wider issue" about a lack of HGV drivers causing distribution problems.

This is not only worrying supermarket bosses who need to restock their stores, but also petrol stations which regularly need new fuel supplies.

ITV News has learned that BP warned the government last Thursday that it may need to prioritise certain petrol stations and some could go one-and-a-half days without stock.

Watch: PM says families will not struggle this winter because energy issues are 'short term'

Responding, Mr Scully said "we're concerned about BP and other sectors where we're hearing those stresses coming to bear".

But he denied suggestions the UK would soon face a fuel shortage.

"No I don't think we are," he said.

"I don't think its useful to speculate on shortages because it just changes consumer behaviour, we're trying to tackle this, at source with the sector, but I wouldn't encourage people to panic buy".

It comes after another two energy providers with almost a million combined customers went bust on Wednesday; Green and Avro Energy.

Industry regulator Ofgem told customers they shouldn't worry as they will be moved onto a new provider soon and any credit they previously had they will get back.

Political Editor Robert Peston on how furlough and the Universal Credit uplift ending may make energy issues worse for some

But Mr Scully admitted customers being transferred to new providers are likely to pay higher bills.

"The government doesn't guarantee the price of deals they were on before because inevitably there's every chance that if they were on a low tariff that can't be maintained by that company, it's not going to be sustainable."

He said the energy price cap will keep prices as "low as possible".

Despite bills rising for many people, the government is committed to cutting the £20 weekly uplift to Universal Credit.

Business Secretary Kwasi Kwarteng told MPs in the House of Commons on Thursday that "it's not my job to say what the tariffs should be".

The nine energy providers who have gone bust so far this year are:

  • Avro Energy

  • Green

  • People's Energy

  • Utility Point

  • PFP Energy

  • MoneyPlus Energy

  • Hub Energy

  • Green Network Energy

  • Simplicity Energy

The government has said it is normal for energy providers to exit the market and is refusing to bail any out - but some analysts believe more than 35 others could also fall by the end of winter if something is not done.

ITV News Political Editor Robert Peston said the collapse of Avro and Green on Wednesday does "not represent a trivial market failure. Together they supply 835,000 customers or 2.9% of the market".

"And as MPs learned today, from regulator and trade association, they are unlikely to be the last energy companies to fail," he added.

Surging wholesale gas prices, which have risen by 250% since January, are crippling the industry, with providers unable to share more of the burden with customers due to an energy bill price cap.

Ministers have repeatedly said issues facing the industry are "short-term" but the business secretary told a committee of MPs that the UK should prepare for "longer term high prices".

The rise in gas prices has been blamed on a number of factors, including a cold winter which left stocks depleted, high demand for liquefied natural gas from Asia and a reduction in supplies from Russia.