Business, Energy and Industrial Strategy Secretary Kwasi Kwarteng told MPs that the Government will “not be bailing out failed companies” as a result of the growing energy crisis, and pledged that there will be “no rewards for failure”.
“The taxpayer should not be expected to prop up companies which have poor business models and are not resilient to fluctuations in price,” he said.
Mr Kwarteng held crisis talks with industry leaders on Monday after a number of small suppliers have gone bust following a 250 per cent surge in wholesale prices since the start of this year, with an increase of 70 per cent in August alone.
Speaking in the House of Commons, he reassured MPs that the country’s supply has “sufficient capacity to meet demand”.
“There is absolutely no question of the lights going out or people being unable to heat their homes”, the Energy Secretary said.
“There will be no three-day working weeks or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided.”
Mr Kwarteng also committed to the price cap, telling the House “it’s not going anywhere”.
“Our priority in this situation has to be the consumer, the Great British public, and the cap has done that effectively. It protects and has protected millions of customers from sudden increases in global prices this winter.
“We’re committed to that price cap and it’ll remain in place.”
One farmer has said their industry is “facing a really dark day” as the shortages mean that pigs could have to be euthanised on farms, as a shortage of Co2 - used to humanely kill the animals - begins to bite.
Kate, who runs a pig farm in the South East of England explained: “If abattoirs are unable to use CO2 for stunning they won’t slaughter many pigs at all, so that again is gonna add to this backlog on British farms.
“We’re facing a really dark day on UK farms because if we get to a point that we have to euthanise pigs on farm simply because they can’t then get butchered, that would be devastating.”
Industry sources said the Government had been clear it would put consumers before businesses in difficulty during roundtable talks.
Following on from that meeting, they added that the industry is discussing two main solutions, one of which could be the creation of a Government backed supplier.
Another possible solution would be to guarantee loans for stable suppliers so they can afford to take on the energy customers of collapsed companies.