Plea for help from energy companies ‘fell on deaf ears’, collapsed firm warns
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Energy companies’ pleas for help from the UK Government have “fallen on deaf ears” despite a majority of suppliers on the brink of administration, the boss of a collapsed business has said.
Green Energy became the fifth supplier to go out of business in September as rising gas prices contributed to the energy crisis engulfing the sector.
Its founder and chief executive has now warned that “a majority” of the 40 energy companies he has spoken to in recent days are likely to collapse without further Government support.
Speaking on BBC Good Morning Scotland, Peter McGirr also said that a meeting with Business Secretary Kwarteng had been “pretty pointless” and suggested that people may be unable to heat their homes over the winter and then face a huge price hike in the new year.
We were in there for an hour and it felt like for an hour we were talking about what colour to paint the stables now that all the horses are bolted
He said: “We have tirelessly lobbied Government and, along with 14 other suppliers, wrote an open letter at the very start of the week saying that the market is in crisis, we all need help.
“Unfortunately it’s fallen on deaf ears.
“We’re doing a round table with the Business Secretary on Tuesday when he finally listened and talked to all the small suppliers, but we were in there for an hour and it felt like for an hour we were talking about what colour to paint the stables now that all the horses are bolted.
“So it was pretty pointless, to be honest.”
Comparing the situation to the food shortages affecting shops, Mr McGirr added: “How’s it gonna look over the course of the winter, when people cannot heat their homes? When, come April 1, we increase people’s bills by hundreds of pounds with a new cap? How are people going to survive unable to heat their home?”
Mr McGirr said the company had “tens of millions in the bank” at the time of its demise but a cash flow shortage meant it would have been unable to trade during the winter.
“We’ve been aware of this behind the scenes for several months and we’ve been working with private equity and working with wholesalers trying to get a suitable deal on the table to survive that,” Mr McGirr said.
He added: “We did have advisers in and we did discuss options and once we’ve exhausted these options, you have no choice but to unfortunately hit the self-destruct button.”
Mr McGirr offered an apology to customers who will be moved to new tariffs with other companies and suggested that added pressures caused largely by the coronavirus pandemic put the company under unsustainable pressure.
He cited the requirement to offer customers payment holidays if they were unable to pay their bills and more energy being required with people staying at home.
On Thursday, Mr Kwarteng denied being complacent over 18-month-old warnings about risks to the UK’s energy supply after 1.5 million people were left without a provider.
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.
Shadow business secretary Ed Miliband quoted a letter from energy regulator Ofgem warning of a “systemic risk to the energy supply as a whole” which had been sent 18 months ago.
Opposition leader Sir Keir Starmer tweeted that the details show the Government was “warned about a looming crisis and didn’t prepare”.
But in the Commons earlier, Mr Kwarteng insisted the industry and market will find the solution to the energy crisis.
Responding to an urgent question from Labour, he said: “The Government has been clear that protecting consumers is our primary focus and shapes our entire approach to this.
“We will continue to protect consumers with the energy price cap.
“The solution to this crisis will be found from the industry and the market, as is already happening, and the Government – I repeat – will not be bailing out failed energy companies.”