Sunak abandons Truss’ plan for the state to buy energy from foreign producers | Economic news

Rishi Sunak has abandoned his predecessor’s plan to intervene in global energy markets by spending billions of pounds on foreign gas imports.

Sky News has learned that Liz Truss’ Energy Supply Task Force (EST), which was launched in September, is being phased out.

Led by Madelaine McTernan, who was chief executive of the government’s COVID-19 vaccine task force, the energy supply initiative was set up to strike long-term deals to bolster Greater Britain’s domestic energy security. -Brittany.

It came after turmoil in energy markets sparked by Vladimir Putin’s invasion of Ukraine triggered record prices for British consumers, exacerbating the cost of living crisis.

Industry sources said over the weekend that locking taxpayers into long-term contracts of up to 20 years at current high prices had been rejected by Mr Sunak’s team.

In a statement in early September, Ms Truss’ administration said EST had “entered into negotiations with domestic and international suppliers to agree long-term contracts that reduce the price they charge for energy and increase the safety of [UK] supply”.

Ms Truss’ aides described it at the time as a landmark reform that underscored her determination to bring the UK’s energy crisis under control.

In mid-October, Sky News revealed that Whitehall officials were in talks with US-based companies including Cheniere and Venture Global, both of which are major players in the liquefied natural gas sector.

An insider said the government had been in talks with “a wide range” of potential suppliers.

However, Ms Truss’ ill-fated premiership ended a few weeks later, prompting her successor to revise his plan for dealing with energy markets.

Responding to a Sky News inquiry this weekend, a government spokesperson said: “While the government continues these efforts and remains fully committed to building our energy resilience, we have concluded that direct gas purchases are not not the best intervention on the market.”

Earlier this month, Mr Sunak and US President Joe Biden unveiled the UK-US Partnership for Energy Security and Affordability, an initiative which the two governments say would focus on reducing dependence on Russian energy exports.

A Whitehall source said on Saturday: ‘Terminating the task force is the right decision – while it was sensible in September for the previous administration to explore these deals, lock in long-term contracts as gas prices are that high just doesn’t make sense.

“It was also just one option on the table – there are a whole range of other actions we are taking now to boost the UK’s energy resilience, including a new energy efficiency program from £1 billion, financial support for Sizewell C and the reintroduction of the Energy Security Bill into parliament.”

Still, the decision not to proceed with Ms. Truss’ plan will raise new questions about the country’s long-term energy security.

Earlier this month, ministers approved the government’s investment decision to commit £700million to the development of the Sizewell C nuclear power station.

UK LNG imports accounted for 17% of the gas supplied to the UK through production and imports last year, according to data released by the Department for Business, Energy and Industrial Strategy.

The government has also acknowledged in recent months that it is seeking long-term deals with foreign states meant to include Norway and Qatar – raising concerns that Britain will pay a ‘security bounty’ in return for guaranteed supplies.

The decision to disband the Energy Task Force comes as Jeremy Hunt, the Chancellor, plans to extend subsidies on energy bills beyond the original March deadline.

Businesses in many sectors, including hospitality, have complained that energy costs, combined with broader inflationary pressures and sour consumer sentiment, have left them on the brink of ruin.

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