Shielding Britain’s households from energy crisis ‘will cost more than £100bn’
The energy industry’s favoured plan to shield Britain’s households from the soaring cost of energy will cost more than £100bn over two years, according to the boss of one of the UK’s largest power operators.
Keith Anderson is chief executive of ScottishPower, one of the big six energy suppliers, which alongside the rival firm E.ON came up with the deficit tariff scheme that was last week backed by the trade body for the sector, Energy UK.
On Friday the energy regulator for Great Britain, Ofgem, publishes its latest update to the price cap from October, which is forecast to soar from its current annual level of £1,971 to £3,582, while it could go even higher in April to as much as £4,400.
Under the ScottishPower proposals, household bills would be protected from rocketing bills by having the cap frozen around the current level, with suppliers covering the difference between that and the wholesale price of gas and electricity by borrowing from a bailout fund arranged by the government through the banks.
The cost would gradually be paid off by consumers over a period of 10 to 20 years, either through government borrowing or spread across higher energy bills, or through both of these means.
Anderson outlined the plan in the spring to the business secretary, Kwasi Kwarteng, who is tipped to become the next chancellor if, as expected, Liz Truss becomes the next prime minister, the Financial Times reported.
It was raised again with Kwarteng and Boris Johnson at their meeting with energy bosses earlier in August where the boss of Centrica is understood to have voiced support.
Anderson said the cost of living crisis caused by soaring energy bills is “bigger than the Covid pandemic”, telling STV News the cost of energy must be frozen.
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