How energy costs are keeping Roaring Twenties dream on pause - Mark Casci

It will not a be a day at the beach for these bosses.

In a previous meeting, MPs on the committee heard complaints that suppliers were disproportionately increasing direct debits and forcing people onto more expensive fixed rate deals instead of the capped variable tariff.

Wholesale gas prices have surged 500 per cent since August last year and the average annual bill under the energy price cap rose £700 at the start of April, with a further steep hike expected in October.

The steep increases have hammered the sector, with a total of 29 energy firms having gone bust since the start of the crisis.

MPs will also question the CEOs on the Energy Security Strategy, concerns around delivering the Government’s rebate scheme, the future viability of the price cap and the lasting impact of this crisis on competition in the market.

Following the interrogation of the heads of the big four, and in what will be equally interesting, MPs will then quiz the CEOs of collapsed suppliers Bulb and Avro. Avro folded owing £90m to customers and its failure is expected to cost consumers £700m.

Bulb, which has been effectively nationalised after being deemed too big to fail, remains operational as the Government seeks a buyer to take it over.

Its chief executive, Hayden Wood, is likely to be asked about the impact of the Government’s ban on it hedging energy, following reports that the cost of its Special Regime could balloon to more than £3bn from an expected £1.7bn as a result of the decision.

MPs will have the wind in their sales for this session.

The astronomical rise in the overheads of businesses and households is causing havoc with budgets.

Data published in today’s UK CFO Study from professional services giant Deloitte shows that almost half of finance bosses expect rises in overheads to be significant.

As a consequence some 71 per cent of CFOs believe operating margins will fall over the next 12 months, compared to 44 per cent in the previous quarter.

This is a huge jump and, while three-quarters of finance bosses expect revenues to rise over the next year, the high appetite for investment and expansion is currently being held back by numerous incumbrances, including geopolitics, supply chain issues, labour shortages, rising inflation and the potential for further interest rate rises – something I believe to be an inevitability given present circumstances.

This state of play is not what many of us were hoping for two years ago.

When we were in the height of the first lockdown, the prevailing consensus was that the short-term impact of the pandemic would be brutal but would in turn likely be followed by a huge rise in activity when vaccines meant that restrictions were lifted and pent-up demand was freed from its shackles.

We had hoped by now to be in the early stages of a Roaring Twenties for the 21st century.

Instead, the hangover of the pandemic and the Government’s botched Brexit trade deal have once again left us trapped, not in our homes but instead in a metaphorical prison of increased costs and events across the globe helplessly beyond our control.

The Roaring Twenties dream will come to pass, I am sure.

The drive to Net Zero will create myriad opportunities here in Yorkshire. The foolish watering down of high-speed rail projects will look less fiscally credible as tax receipts swell.

But as the energy bosses will discover today, the increased costs imposed on us all mean that this dreamland will remain on pause for at least another year.

Let’s celebrate properly when the party does finally arrive.