Sunak cancels Truss’s plan to buy energy from foreign producers Business news

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Rishi Sunak has abandoned his predecessor’s plan to meddle 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, has been cancelled.

Headed by Madeleine McTernan, who was director general of the government’s COVID-19 Vaccine Task Force, the Energy Supply Initiative was set up to strike long-term deals aimed at strengthening Britain’s domestic energy security.

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

Industry sources said this weekend that tying taxpayers into long-term contracts potentially lasting up to 20 years at current high prices had been rejected by Sunak’s team.

In a statement in early September, Ms Truss’s management said EST “has begun negotiations with domestic and international suppliers to agree on long-term contracts that reduce the price they charge for energy and increase the security of energy.” [UK] Emdad”.

Truss’s aides described it at the time as a major reform that underscored her determination to get 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 major players in the LNG sector.

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

Truss’ ill-fated premiership ended a few weeks later, prompting her successor to revise her plan to intervene in energy markets.

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

Earlier this month, Mr Sunak and US President Joe Biden unveiled the UK-US Energy Security and Affordability Partnership, an initiative both governments said 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 made sense in September for the previous administration to explore these contracts, striking long-term contracts while gas prices are so high just doesn’t make sense.

“It was also only one option on the table – there is a whole host of other measures we are taking now to strengthen UK energy resilience, including a new £1 billion energy efficiency scheme, financial support for Sizewell C and the reintroduction of the Energy Security Bill to Parliament.”

However, the decision not to go ahead with Ms. Truss’s plan will raise renewed questions about the country’s long-term energy security.

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

British LNG imports accounted for 17% of the gas supplied to the UK through production and imports last year, according to data published 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 countries that are understood to include Norway and Qatar – raising fears that Britain will pay a “security premium” for guaranteed supplies.

The decision to dissolve the energy task force comes as finance minister Jeremy Hunt is reported to be considering extending the energy bill subsidy beyond the original March deadline.

Companies in many sectors, including the hospitality sector, have complained that energy costs combined with broader inflationary pressures and souring consumer sentiment have left them on the brink of collapse.

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