BORIS Johnson’s Brexit bluster has once again come back to bite him as energy prices soar for UK customers.
The Prime Minister, as well as Vote Leave ally Michael Gove, promised in 2016 that gas bills would be slashed if voters backed Brexit.
Writing for The Sun ahead of the EU referendum, the Tory pair pledged "fuel bills will be lower for everyone” as they outlined plans to cut VAT on household energy payments.
The Vote Leave chiefs said leaving the EU would allow Westminster to scrap a £2 billion per year tax on electricity prices. Gove and Johnson claimed they could fund this out of £11bn a year saved from Britain’s contributions to the European Commission.
Fast forward to 2021, and the 5% VAT rate on energy bills is still in place. The Treasury said earlier this year that there are "no plans" to cut it.
But Gove and Johnson's comments have come into sharper focus more recently after wholesale prices for surged by 250% since January – with a 70% rise since August alone, causing energy bills to soar.
Business Secretary Kwasi Kwarteng is holding a fresh round of crisis talks with the energy industry amid fears more small suppliers could go to the wall.
It is thought the gas crisis could increase household bills by up to £400 a year and even exacerbate food shortages due to a lack of carbon dioxide, which is used in meat production and the distribution of frozen food.
Health chiefs in England have also warned that CO2 shortages mean some operations, including invasive surgeries and endoscopies, may have to be cancelled. However, one senior NHS source said the UK Government had assured them that its access to CO2 would not be impacted.
READ MORE: UK Government denies there will be winter crisis as gas prices soar
The crisis stems from a global spike in demand for gas. There are several reasons for this.
The economy is opening up from its pandemic lows, raising demand. Europe is also about to start entering winter, when gas demand will be highest, especially from countries such as the UK which overwhelmingly rely on gas to heat homes.
Supply from Russia has also dried up recently, and demand is high in Asia, which is putting pressure on international markets.
In the UK, several gas platforms in the North Sea have closed to perform maintenance that was paused during the pandemic.
Cables that import electricity from France were damaged last week, and September has not been a very windy month. These problems have meant that more gas is needed to produce electricity.
Johnson has said "we'll have to do everything we can" to prevent energy companies going under as wholesale gas prices surge – but refused to rule out the prospect of the crisis lasting for months.
Speaking to broadcasters on the tarmac of New York's JFK airport, the Prime Minister said: “It could be faster than that, it could be much faster than that. But there are problems with shipping, with containers, with staff. There are all sorts of problems that affect the entire world.”
He added: "I think people should be reassured in the sense that yes there are a lot of short-term problems not just in our country, the UK, but around the world caused by gas supplies and shortages of all kinds.
"This is really a function of the world economy waking up after Covid.
"We've got to try and fix it as fast as we can, make sure we have the supplies we want, make sure we don't allow the companies we rely on to go under. We'll have to do everything we can.
"But this will get better as the market starts to sort itself out, as the world economy gets back on its feet."
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