Energy bills for millions of customers will not rise this winter, the business secretary has said, insisting that the price cap will remain in place.
Kwasi Kwarteng said that keeping the cap in place this winter is “non-negotiable for me” after some firms lobbied for an increase to prevent collapses due to the energy crisis.
However, the Tory MP was unable to guarantee there will be no interruptions to gas supply this winter but said he is "as certain as I could be" that it will continue unhindered.
Despite saying prices would not rise, the Spelthorne MP did not set out any additional support for struggling businesses after bosses and some Tory MPs called for help to prevent companies going under as wholesale prices soar.
Since the beginning of the year, the price of wholesale gas has increased by 250%, contributing to nine energy firms going bust.
Soaring wholesale prices mean many energy companies say they are unable to charge customers enough.
While Mr Kwarteng said prices would not increase this winter, at the beginning of October, millions of households saw their energy bills increase by £139 as the winter price cap came into force and experts believe bills could rise by hundreds of pounds next year when the next price cap is set.
Research agency Cornwall Insight predicts further volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to about £1,660 in summer, almost £400 higher than the £1,277 price cap set for winter 2021-22.
This would be an increase of 30%.
Regulator Ofgem reviews the price cap once every six months, and changes it based on the cost suppliers have to pay for their energy, cost of policies and operating costs, among other things.
As ministers face pressure to prevent industries grinding to a halt and warnings over a cost of living crisis, Boris Johnson reportedly flew to Marbella to holiday in a private villa on the Costa del Sol.
Downing Street did not deny reports he had travelled to Spain, and declined to say whether the prime minister was working at No 10 or in Chequers, as is commonplace at weekends.
Mr Kwarteng sought to reassure the public of “the safety net that we have in place to shield consumers from instant price hikes this Christmas, and ensure everyone gets the supply they need”.
“Despite some pushing me to lift the cap, I am absolutely clear it is here to stay and will remain at the same level throughout winter,” he wrote in the Sunday Express.
“Keeping this protection in place is non-negotiable for me.”
Some energy firms have said the cap is not “fit for purpose” and called for reforms and emergency support to prevent collapses, which will also burden costs on the taxpayer.
But Mr Kwarteng said that although he was speaking to the Treasury to try to support businesses struggling in the energy crisis, he said he was not requesting subsidies.
"We've already got subsidies in place and it's very clear that a lot of those are working," Mr Kwarteng told Sky News' Trevor Phillips on Sunday programme.
"On the consumer side we've got an energy price cap and on the industry side we have measures where we support industries, heavy electricity users."
However, ITV News Political Reporter Shehab Khan said that a source at the Treasury had told him they were not engaged in talks with the business secretary about the energy crisis.
Many in the energy industry do not believe enough is being done to support them.
Paul Richards, the chief executive of Together Energy – which he said is currently making losses, told BBC Radio 4’s Today programme: “The price cap as a mechanism is not fit for industry, nor is it fit for customers.”
He said the cap is currently “too good to be true” for customers and will feel like a “very, very poor deal” in April when it changes following one of the twice yearly reviews by Ofgem.
Proposing reforms including inspecting the cap four times a year, Utilita Energy’s non-executive chairman Derek Lickorish said: “The cap is not fit for purpose.
“There is no doubt that there is going to be a huge cost paid by customers for failed suppliers… certainly well over £100 million for every 200,000 customers that fail.
“The government has to look at means by which they can support not only energy suppliers but also big industry.”
Mr Kwarteng was also questioned about power blackouts, but was unable to guarantee there will be no interruptions to gas supply this winter but said he is "as certain as I could be" that it will continue unhindered.
He told Sky News' Trevor Phillips on Sunday programme: "I'm very committed and convinced that we will have full energy supply.
"I'm as certain as I could be. Because obviously this is a global issue, we've seen right across the world real supply chain pressures, you've seen the Chinese have power blackouts, they're rationing supply, here in the UK our job is to make sure there is minimal disruption."
Mr Kwarteng was told at an emergency meeting on Friday that energy intensive industries need a “winter package of measures” to prevent further interruptions to supply chains.
Also appearing on Sky was the chief executive of Energy UK who warned that more retailers are expected to go out of business this winter due to rising gas prices,
Emma Pinchbeck said that "exposed" businesses such as energy-intensive users and retailers will be the worst hit.
She said: "We are expecting more retailers to go out of business this winter. We had around 50 suppliers when we started, and we're expecting to see more leave the market.
"We have had a process of consolidation, we have had retailers leaving the market in previous years.
"The issue is how many are failing at once and whether or not our mechanisms, which are in place to look after customers when that happens, are up for that many failures in one go.
"And of course what that means for retail means on the other side of this in the spring or when prices return to normal."