Energy crisis will hit those in the north hardest, Kwasi Kwarteng admits

People in the north will be hit hardest by the spiralling cost of energy, a Cabinet Minister has admitted, as the cost of living looks to soar over the approaching months.

General view of a disused gas holder in central London. (PA/Dominic Lipinski)

Politicians on both sides of the Commons agreed that being more prone to colder weather over the winter means that those in the northern regions of the country will have their heating on for longer, and bills will stack up.

The comments come as wholesale gas prices continue to go through the roof putting pressure on energy firms big and small.

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Speaking in Parliament yesterday, York Central Labour MP Rachael Maskell put to Business Secretary Kwasi Kwarteng that “the rise in energy prices will disproportionately impact people living in the North because it is colder during the winter in the North.

“So what assessment has he made of the regional disparities and how is he going to mitigate against that?”

Mr Kwarteg said that she “raises a very fair point” and added: “Clearly in terms of the gas price the single most important determinant of it is the weather, and she’s absolutely right.

“That’s why we’ve got schemes like the Warm Home Discount and that’s why we’re absolutely focused on protecting the most vulnerable customers, wherever they are in the UK.”

Earlier yesterday, a Minister in Mr Kwarteng’s department had said that the energy price cap was under “pressure” and that Government is preparing for a “worst case scenario” of gas costs remaining high for some time.

Paul Scully told Sky News: ““Clearly, as Government, we need to make sure we are planning for the worst-case scenario because we want to make sure we can protect consumers.”

Pressed on what the worst-case scenario looked like, he added: “That is goes on for longer than a short spike. I can’t give you a figure now.”

A host of energy companies have gone to the wall in recent weeks after the sector was hit by rocketing global wholesale gas prices.

With 800,000 consumers losing their suppliers on Wednesday alone, two energy companies have since looked to make it more difficult for new customers to sign up for their services as they attempt to survive the current turbulence.

Bulb scrapped its popular refer-a-friend scheme as it tries to raise new cash, while rival Ovo Energy changed its website by removing an invite to “get an energy quote in under two minutes”.

Avro, with 580,000 domestic gas and electricity customers, became the biggest of a series of recent failures in the energy market on Wednesday, with the number of collapsed companies accounting for more than 5% of the market.

Green – which also closed on Wednesday – PFP, MoneyPlus, Utility Point and People’s Energy have all exited the supply market in just over two weeks.

HUB Energy, which had 6,000 customers, stopped trading last month. Ofgem has said it will ensure a new supplier is appointed to take over Avro’s clients and Green’s 255,000 households.