Energy cap: UK facing prospect of power blackouts this winter, expert claims

The price cap now due to rise to £3,549 from October

The UK is facing the prospect of power blackouts this winter, an energy expert has warned, as he said the UK Government needed to find more cash to “help people through this crisis”.

With the price cap now due to rise to £3,549 from October, London Energy Consulting chief executive David Cox said the mechanism was “not protecting consumers in any way”.

People will “only get through this winter with the aid of Government money”, he insisted – accusing politicians at Westminster of “glossing over” the problem.

What did he say?

Speaking on The Sunday Show, Mr Cox said: “We’re going to be short of gas in Europe for this winter. That will drive prices potentially even higher.

“Not only that, we might be short of gas to the extent that we have blackouts, we don’t have enough gas to burn to make electricity, and that is a serious problem the Government are glossing over at the moment.”

He said that the North Sea supplies about 40% of the UK’s gas, leaving the UK to import the remainder of its supply.

However, Mr Cox said shortages in Europe meant the UK would not be able to turn there and could instead have to import supplies from countries further afield, such as the US and Quatar.

Chimneys at the gas fired Grain power station, operated by Uniper SE on the Isle of Grain on August 22, 2022 in Rochester, England. (Photo by Dan Kitwood/Getty Images)

What happens if we don’t get the gas supply needed?

The analyst said that 40% of UK electricity came from gas-fired generation, adding: “If we don’t get that gas the lights will go out and we will have power cuts.”

He went on to warn “if we have a cold winter, colder than average, we are in serious, serious problems”.

His comments came as he insisted more public cash was needed to help people during the “significant energy crisis”.

Mr Cox said: “Where that money comes from, how it’s paid, are political choices. You can either give it directly to consumers, and we have seen some of that about to happen.

“Or you can give it to the energy companies as a loan from government, and they cap the tariff price at what it is now and that will help everyone, and you can try to target more help on the poorer consumers.

“There’s no other way of doing it, it has to come from Government money, taxpayers’ money, to help people through this crisis. It really is a significant energy crisis.”

Have Truss or Sunak offered any solutions?

Rishi Sunak’s team has warned that cutting VAT by 5% across the board would be “regressive” and cost tens of billions of pounds amid reports that Liz Truss is considering the move as a “nuclear” option.

It is one of a series of possible strategies to ease the cost-of-living crisis being drawn up by the Treasury for the new prime minister to look at when they take office, according to The Sunday Telegraph.

The newspaper said the 20% headline rate of VAT could be cut by up to 5%, saving the average household more than £1,300 per year.

But a source from Mr Sunak’s campaign said this would be “incredibly regressive” and cost north of £30 billion.

The Sunday Times also reported that Ms Truss is considering slashing VAT as part of an emergency package to help households cope with rising prices.

Another option being weighed up by the Foreign Secretary is a cut to income tax, the paper said, with proposals from allies including increasing the level above which people start paying the levy.

Others in the Truss camp have suggested raising the tipping point for the higher rate of 40% and cutting the basic rate below 20%, it added.