Britain is making contingency plans for a winter energy crisis that could involve controlled power cuts for industry and households, Chancellor Nadhim Zahawi hinted on Wednesday.
Mr Zahawi called in energy bosses for talks as the rival camps competing to form the next government clashed over how Rishi Sunak or Liz Truss would ease the cost of living crisis as prime minister.
An executive at EDF, one of Britain's largest energy companies, called on Ms Truss and Mr Sunak to work together to help support customers with runaway energy bills.
Amid a bleak economic outlook, Bloomberg reported that plans were in place for a scenario involving cold weather and reduced imports from Norway and France in which electricity supplies fall 20 per cent short and have to be rationed.
Far from denying this, Mr Zahawi said on a visit to Northern Ireland that the government was planning "for every outcome" and that "reasonable worst-case scenarios" were being looked at.
But he said: "I don’t think we’ll be in that world, in that space."
Fears over how households will navigate winter were heightened by a forecast that suggested the energy price cap would rocket to £3,582 ($4,326) a year in October and £4,200 ($5,088) in the New Year.
It came after the Bank of England warned last week that Britain was on course for a long recession as energy prices push inflation towards 13 per cent.
Philippe Commaret, managing director of customers at EDF, said current government support was not enough as the price cap on energy bills is set to almost double in October and increase even further at the start of next year.
"The events of the past month have changed the outlook on energy bills dramatically and sadly, the support previously announced will simply not go far enough," he said.
"We are asking government and the two Conservative candidates to work with industry so we can find a viable solution for those customers most in need this winter.
"Customers need to know now that help is coming. Delaying a decision will cause anxiety for millions of people, and discussions need to happen now."
Mr Zahawi was expected to meet energy bosses this week to "knock some heads together" about the crisis, cabinet minister James Cleverly said, amid frustration that companies are making vast profits during the crisis.
But the political response has been muffled by the race to select a new prime minister on September 5, with ministers citing the convention that an outgoing government should not make major policy decisions.
Conservative leadership campaign - in pictures
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Candidates Rishi Sunak and Liz Truss at the Conservative Party leadership election hustings at Wembley Arena, London. This was the final hustings attended by Tory Party members who will vote for the new leader and next prime minister. EPA -
Liz Truss addresses Conservative Party members at Wembley Arena. AP -
Mr Sunak puts forward his case to be leader while speaking at Wembley Arena. Bloomberg -
Mr Sunak visits his family's old business, Bassett Pharmacy in Southampton, while on the campaign trail. Reuters -
Ms Truss speaks to staff at Condimentum Ltd at the Food Enterprise Park in Norwich. Getty Images -
A Rishi Sunak supporter at a hustings event in Norfolk. PA -
Mr Sunak greets people at a leadership hustings in Manchester. Bloomberg -
Ms Truss poses for a selfie with a supporter as she arrives for the event in Manchester. Getty -
Rishi Sunak looks through the sights of an anti-tank missile launcher, supplied to Ukraine, during a visit to the Thales Defence System plant in Belfast, Northern Ireland. AP -
Liz Truss at a Conservative Party leadership campaign event in Belfast. Getty -
Liz Truss meets supporters before a hustings in Perth, Scotland. Getty -
Rishi Sunak speaks during a campaign visit to Cluny Castle in Inverurie, Scotland. Getty -
Police hold back protesters outside Perth Concert Hall, Scotland, where Conservative leadership candidates Liz Truss and Rishi Sunak were speaking. PA -
A mural showing the two leadership contestants appears on a wall in Belfast, Northern Ireland. AP -
Rishi Sunak during a visit to St John's Wood Synagogue, north London. PA -
Liz Truss at the Conservative Party leadership election hustings in Cheltenham. EPA -
Rishi Sunak during a hustings event in Cheltenham. Reuters -
Liz Truss speaks to scientists during a campaign visit to a life sciences laboratory at Alderley Park in Manchester. PA -
Rishi Sunak during a campaign hustings in Darlington, England. Bloomberg -
Liz Truss meets party members before she speaks at the Darlington campaign hustings. Getty -
Rishi Sunak arrives for the Darlington hustings. Getty -
Liz Truss plays pool during a visit to the Onside Future Youth Zone in London. Reuters -
Rishi Sunak looks at a book with Teddy Openshaw, 4, as his father, Henry, looks on after a Conservative leadership campaign event in Ribble Valley, Lancashire, England. Getty -
Liz Truss plays table tennis with former Conservative party leader Iain Duncan Smith during a visit to the Onside Future Youth Zone in London. Reuters -
Liz Truss with supporters at a campaign event in Solihull, England. Reuters -
Rishi Sunak attends a campaign event held by his party in Bexhill, England. Reuters -
A protester is removed as Ms Truss speaks during the Conservative Party leadership hustings in Eastbourne. Bloomberg -
Mr Sunak speaks at an event in Edinburgh. PA -
Ms Truss leaves the hall in Exeter, south-west England, after her speech to a Conservative Party membership hustings. Getty -
Mr Sunak speaks at the University of Exeter in south-west England. AP -
A supporter of Ms Truss at a Conservative Party hustings in Exeter, south-west England. Getty -
Ms Truss at a hustings event at the Pavilion conference centre at Elland Road in Leeds. PA -
Mr Sunak in Salisbury watching a screening of the Uefa Women's Euro 2022 final between England and Germany at Wembley stadium. England won 2-1 in extra time. PA -
Ms Truss before the Uefa Women's Euro 2022 final at Wembley stadium in London. AFP -
Mr Sunak meets Tory members at Fontwell Park Racecourse. Reuters -
Ms Truss at an event in Dereham, Norfolk. AFP -
Mr Sunak in Ropley, near Winchester, Hampshire. PA -
Ms Truss speaks as Conservative Member of Parliament Tom Tugendhat looks on at a Conservative Party leadership campaign event at Biggin Hill Airport. Getty -
Ms Truss on the campaign trail in Woodford Green, on the outskirts of London. Reuters -
Mr Sunak at a Conservative Party hustings event in Leeds. AFP -
Ms Truss speaks at the hustings event in Leeds. AFP -
Sunak and Truss-themed souvenirs at a stand during the Leeds hustings event. Reuters -
Ms Truss, and her mother, Patricia, arrive for the hustings event. Getty -
Ms Truss poses with supporters in Morley, England. Getty -
Mr Sunak delivers a speech during a campaign event in Newmarket. AFP -
Ms Truss and Jake Berry, MP for Rossendale and Darwen, during a visit to a broadband interchange company in Leeds. PA -
Mr Sunak answers questions as he takes part in the hustings in Leeds. AFP -
Ms Truss speaks at an event at a private house with members of the Conservative Party in Woodford Green. PA -
Ms Truss and Mr Sunak pose for a picture before a BBC leadership debate at Victoria Hall in Hanley. Getty -
Ms Truss addresses Mr Sunak during the televised debate. Getty -
Mr Sunak, with daughters Krishna and Anushka, and wife Akshata Murthy, during a visit to Vaculug tyre specialists at Gonerby Hill Foot, Grantham. PA -
Ms Truss speaks to people while campaigning in Marden. Getty -
Ms Truss celebrates after being named, along with Mr Sunak, one of the final two candidates in the race to become the UK's next prime minister. PA -
Mr Sunak outside his campaign office in central London. EPA -
Ms Truss outside Downing Street in London. Reuters -
Rishi Sunak meets Conservative Party members and activists, in Teesport, Redcar. Reuters -
Conservative leadership candidates Mr Sunak, Ms Truss, Kemi Badenoch, presenter Julie Etchingham, Tom Tugendhat and Penny Mordaunt during 'Britain's Next Prime Minister: The ITV Debate' in London. EPA -
Ms Badenoch arrives at Here East studios in Stratford, east London, before a live television debate. PA -
Mr Sunak arrives at a London event to launch his campaign to be the next Conservative Party leader and UK prime minister. Reuters -
Mr Tugendhat appears on the BBC One current affairs programme, 'Sunday Morning'. PA -
Ms Badenoch, Ms Mordaunt, Mr Sunak, Ms Truss and Mr Tugendhat before the live television debate. PA -
Ms Mordaunt arrives for the launch of her Conservative leadership campaign at the Cinnamon Club in Westminster. PA -
Ms Truss speaks at the launch event for her campaign to become the next leader of the Tory Party and Britain's prime minister, in London. EPA -
Chancellor of the Exchequer Nadhim Zahawi, one of the candidates who has been knocked out of the race, giving a speech at the Churchill War Rooms. PA -
Former leadership candidate Jeremy Hunt appearing on the BBC One current affairs programme, 'Sunday Morning'. PA -
Sajid Javid attending the launch of his campaign to be Conservative Party leader and prime minister, at the Cinnamon Club in London. He has since been knocked out of the contest. PA -
Rehman Chishti is interviewed after announcing his bid to become the next prime minister. Mr Chishti is no longer in the race. Getty -
Mr Tugendhat speaking at the launch of his campaign. PA -
Culture Secretary Nadine Dorries and Conservative MP Iain Duncan Smith arrive for the Truss campaign launch event. Getty -
Former leadership candidate Attorney General Suella Braverman at the Churchill War Rooms in central London. PA -
Supporters of Mr Sunak wait for his arrival ahead of the campaign launch. Bloomberg -
Mr Tugendhat makes a speech at the launch of his campaign. PA -
Mr Javid mops his brow while launching his campaign. Getty -
Ms Truss leaves for work after her announcement that she would be running for the leadership of the Conservative Party. Getty
While European governments seek to conserve gas use and increase storage after Russia's invasion of Ukraine, the UK government has been split into two camps led by Conservative leadership candidates Foreign Secretary Liz Truss and former chancellor Rishi Sunak who have clashed over how to respond.
Charities, business groups and politicians have called on Ms Truss and Mr Sunak to set out how they would help struggling households to cope with the forecast 82 per cent rise in energy prices in October.
Ms Truss is promising an emergency budget to taxes, telling a Tory hustings in Darlington on Tuesday that ministers should "help people have more than their own money" rather than taking with one hand and giving with the other.
The issue has emerged as a key dividing line in the Tory race, with Mr Sunak saying tax cuts would not help pensioners and hinting he would offer more direct support than the grants he previously announced when he was chancellor.
Both candidates played down suggestions from former prime minister Gordon Brown and others that the current government and the rival camps should agree a line on the cost of living crisis so that decisions do not wait until September.
Ms Truss branded the idea a "kangaroo committee" and rejected what she called "Gordon Brown economics", while Mr Sunak said a pact would only work if his opponent changed her mind about focusing on tax cuts.
Conservative MP and Sunak backer Theresa Villiers hinted at a possible further windfall tax by saying that “we do need to look at the huge levels of corporate income which are being experienced at the moment... to see if [oil companies] can play a part in further help of their customers".
“I think we need to take care that we don’t disincentivise vital investment, which is the long-term solution to getting energy costs down and ensuring our energy security. But, yes, of course we need to take seriously whether the power companies could play a bigger part," she said.
A Truss supporter, junior Treasury minister Simon Clarke, said lowering taxes would boost economic growth overall and help avoid a recession.
The opposition Labour Party was quick to point the finger at Tory ministers over the potential power cuts.
"This is the disgraceful result of 12 years of Tory government that has failed to prepare and refused to invest," said shadow climate change minister and former Labour leader Ed Miliband.
He condemned the government for closing a home insulation scheme, dragging its feet over onshore wind and shutting down some of Britain's gas storage facilities.
Ministers plan to expand offshore wind parks and the nuclear sector, but Mr Sunak has promised to cancel even a limited expansion of onshore wind.
