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Energy firms supplying ‘six million UK homes’ face collapse

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How the gas crisis has erupted… and how it could get worse 

WHY ARE GAS PRICES RISING SO SHARPLY? 

The economy is opening up from its pandemic lows, so demand for gas is increasing.

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.

WASN’T THAT QUITE PREDICTABLE?  

Yes, but a perfect storm of other problems has also hit the sector. Supply from Russia has 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.

In a further stroke of bad luck, 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. 

SO WHAT PROBLEMS ARE BEING CAUSED? 

The high demand and low supply has been sending wholesale prices spiking, putting smaller energy suppliers under huge pressure.

They are less likely to have ‘hedged’ by buying energy well in advance so they can manage costs over the longer term. As a result they face having to buy energy at ‘spot’ prices and incurring huge losses.  

Five have gone bust over the past month or so, and there are concerns more could follow. 

Ofgem has systems to allocate their customers to other suppliers. But appetite to take people on might be limited given the strains caused by rising wholesale costs, and the fact the government’s cap limits scope for putting up prices. 

Inevitably as the cap is updated this autumn and then next spring consumer bills will go up sharply – possibly by nearly double.

IF THIS IS ABOUT ENERGY COSTS WHY ARE WE TALKING ABOUT FOOD SHORTAGES? 

Aside from direct energy prices, there are also severe and less obvious knock-on effects. 

For example, fertiliser plants have temporarily shut due to the high costs, and they produce CO2 that is used in food processes such as animal slaughtering, and even for medical operations. 

Avro Energy and Green today became the latest energy firms to go out of business as soaring gas prices continued to batter the sector. 

Ofgem said that it would ensure that Avro’s 580,000 domestic gas and electricity customers, and Green’s 255,000 households would be protected.

The regulator will choose a new supplier for the households, and said customers should wait to be contacted by their new supplier.

‘I want to reassure customers of Avro Energy and Green Supplier Limited that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue,’ Ofgem director of retail Neil Lawrence said.

‘If you have credit on your Avro Energy or Green Supplier Limited account this is protected and you will not lose the money that is owed to you.’

Up to one-in-four UK homes use companies whose wholesale supplies are not ‘hedged’ against market fluctuations, leaving them heavily exposed, industry sources told Sky News.

Wholesale prices for gas have increased 250% since the start of the year, and 70% since August, meaning these unprotected firms are buying energy for less than they sell it to customers. 

Today Igloo Energy took steps to appoint administrators Alvarez & Marsal for a potential insolvency, Sky reported.  

Bulb – which has 1.7million customers – is currently seeking fresh private financing. However, it hedges against the rising cost of energy by agreeing contracts in advance so enjoys some protection. 

A source speaking to MailOnline disputed the idea it was seeking a ‘bailout’, saying this wrongly suggested the company was at risk of collapse.  

Nine firms have now ceased trading this year, with the head of regulator Ofgem warning more are likely to follow leaving ‘well above’ hundreds of thousands of customers in limbo. 

Jonathan Brearley declined to give an estimate when in front of MPs on the Business, Energy and Industrial Strategy Select Committee but said: ‘We do expect a large number of customers to be affected, we’ve already seen hundreds of thousands of customers affected, that may well go well above that.’ He warned the crisis may not be temporary.  

However, business secretary Kwasi Kwarteng today rejected claims that there could be just 10 energy firms left by the end of the year as he repeated his vow that ‘lights won’t go out’. 

He told MPs: ‘I don’t see how they got to that figure. I would be very surprised if we got to that figure … it is not something I am anticipating.’ 

It is expected that the price cap could rise to £1,500 for the average household in an attempt to put energy companies’ finances on a more sustainable footing. 

It came as companies today added £600 to an annual gas and electricity bill amid claims of ‘price gouging’ to cash in on the crisis as rivals go to the wall.

Ministers have admitted that some families will face a choice between ‘eating and heating’ this winter and dismissed pleas from Britain’s floundering energy providers to scrap the energy cap that protects millions of the poorest households.

This morning it was revealed that suppliers are now offering customers fixed rate dual fuel deals of around £1,900-a-year. That is already £624 more than the proposed price cap of £1,277 from October 1 for those on standard variable contracts.

The eye-watering deals, more than double the £850 average bill in 2020, are on the market to lure in those who want to fix their gas and electricity prices for 12 months in case they continue to rise. 

Ovo Energy launched their ‘Better Smart 17 September 2021’ tariff this week which has an annual bill for the average user of £1,863.85.

And So Energy launched their ‘So Clementine One Year – Green’ last week, which has an annual bill for the average user of £1,900.77.

Business Secretary Kwasi Kwarteng warned of 'difficult' months to come as he accepted that a swathe more suppliers could go bust amid rocketing wholesale gas prices

Business Secretary Kwasi Kwarteng warned of ‘difficult’ months to come as he accepted that a swathe more suppliers could go bust amid rocketing wholesale gas prices

Critics have said it is evidence of ‘price gouging’ – when businesses heavily inflate the price of products or services that are in high-demand. It inevitably leads to consumers paying over the odds for services. 

Business Secretary Kwasi Kwarteng warned of ‘difficult’ months to come as he accepted that a swathe more suppliers could go bust amid rocketing wholesale gas prices – but insisted that many simply had bad business models and deserved to collapse.

He stressed there is no question of the government’s cap on the average bill being dropped, and said there will be no bailouts that ‘reward failure’. However, he hinted that larger suppliers that agree to take on customers left in limbo could get support.

Appearing on ITV’s Good Morning Britain, Mr Kwarteng was told by presenter Susanna Reid that people would face ‘the choice between heating their homes and staying warm or eating, parents who may forego meals in order to feed their kids’.

He replied: ‘You’re right, and that’s why I’m very keen to keep the warm home discount and also there are other winter fuel payments that we’re looking at.’

Pressed on whether he was asking Chancellor Rishi Sunak to raise the warm home discount, he said: ‘We have discussions about the Budget, and you will see what happens in the Budget. I can’t possibly pre-empt or anticipate what will be in that Budget ahead of time, you’ll appreciate that.’ 

In more grim news for the taxpayer, Mr Kwarteng also suggested that carbon dioxide producers could be subsidised to re-start their plants, which have been temporarily shut down to avoid paying brutal market gas prices. 

The pause is threatening to cause chaos for the food industry as well as the nuclear sector and even the NHS – with warnings British meat will be off shelves within days and tens of thousands of pigs will need to be slaughter and put into mass graves on farms. 

In a round of interviews this morning, Mr Kwarteng said: ‘I’ve been very clear that the energy price cap is staying even though some energy companies I read today are asking for it to be removed, I’ve been very clear that that’s staying, so we’re protecting customers there.

‘We’ve got the warm home discount, we’ve got winter fuel payments, which are again focused on the most vulnerable customers. 

‘So, we’re completely focused on helping vulnerable customers through this winter, particularly with regard to energy prices.’  

Mr Kwarteng met with panicked energy bosses yesterday in Whitehall and slapped down calls for the cap on the average bill – which is due to rise to £1,277 from October 1 – to be abolished or suspended. It is expected to rise again to around £1,500 in April. 

Average household bills in the UK are set to rise for 'standard variable' customers when the new price cap comes into force next month. The price cap, set by regulator Ofgem, will stop bills rising above £1,277 a year. Ofgem has already announced a further price cap rise for April next year, and this will see prices capped at £1,455. It is unclear whether the price cap will rise again the following October. Given the global uncertainty with wholesale gas prices, UK energy firms have today introduced 'fixed rate' deals up to £600 more than the £1,455 April cap, hoping customers fearful of ever-changing prices may prefer to a higher monthly tarriff, but one they are guaranteed will not fluctuate due to market forces - meaning families can accurately factor in energy costs into their household expenses. Setting the cost of a product way above the expected market value is known as 'price gouging'.

Average household bills in the UK are set to rise for ‘standard variable’ customers when the new price cap comes into force next month. The price cap, set by regulator Ofgem, will stop bills rising above £1,277 a year. Ofgem has already announced a further price cap rise for April next year, and this will see prices capped at £1,455. It is unclear whether the price cap will rise again the following October. Given the global uncertainty with wholesale gas prices, UK energy firms have today introduced ‘fixed rate’ deals up to £600 more than the £1,455 April cap, hoping customers fearful of ever-changing prices may prefer to a higher monthly tarriff, but one they are guaranteed will not fluctuate due to market forces – meaning families can accurately factor in energy costs into their household expenses. Setting the cost of a product way above the expected market value is known as ‘price gouging’.

What companies are supplying energy? 

The government has been trying to open up the UK’s energy market to more competition, meaning there are far smaller players involved than there used to be.

The traditional Big Six tend to use their reserves to ‘hedge’ against changes in prices, and can withstand sharp increases.

Outside that group there are four larger ‘challengers’ that are also fairly well-established.

But then there are dozens more, often little-known, suppliers that have been trying new approaches and look far more vulnerable to the shifts. 

The seven energy companies to have gone bust in 2021

Simplicity Energy

Green Network Energy 

Hub Energy

PfP

MoneyPlus

Utility Point

People’s Energy 

The ‘Big 6’ energy suppliers

British Gas

Scottish Power

Npower

E.ON

EDF Energy

SSE – Swalec, Scottish Hydro, Southern Electric and Atlantic

The challengers 

Ovo Energy 

Shell Energy 

Octopus Energy

Utilita Energy

The remaining firms 

Affect Energy –

Atlantic –

Avro Energy –

Better Energy –

Boost Energy –

Breeze Energy –

Brilliant Energy –

Bristol Energy 

Bulb Energy – seeking government bailout 

Co-Operative Energy 

Daligas –

EBICo –

Economy Energy –

Economy Seven Energy –

Ecotricity –

Engie –

Enstroga –

Entice Energy –

ESB Energy –

Eversmart Energy –

Extra Energy –

Fairer Power –

first:utility –

Flow Energy –

Foxglove Energy –

Future Energy – 

Gen4U –

GnErgy –

Go Effortless Energy –

Good Energy –

Green –

Green Energy UK –

Green.Energy 10,000

Green Network Energy –

Green Star Energy 

Gulf Gas & Power 

igloo.energy –

IRESA Limited –

iSupply –

Leccy –

Lumo –

LOCO2 Energy –

M&S Energy –

Nabuh –

npower Select –

Oink Energy –

One Select –

Orbit Energy – 

Out Fox the Market –

PFP Energy –

OutFox the Market –

Powershop –

Pure Planet 

Qwest –

Robin Hood Energy –

Sainsbury’s Energy –

Simplicity –

So Energy

Solarplicity –

Spark Energy –

Southern Electric –

Scottish Hydro –

Swalec –

Telecom Utility Warehouse  

Together Energy –

Tonik 

Toto –

Usio Energy Supply Limited –  

Zog Energy

 

Seven firms have collapsed in 2021 in total and many have only been in existence for five years. Experts have predicted that up to 39 more could go in the next year.

One senior industry source told the Telegraph: ‘For the time the price cap has been in place, suppliers have generally been losing money or making very tiny margins.

‘So the price cap is great for consumers, but companies are really struggling. There have definitely been unintended consequences.’

But Mr Kwarteng told Sky News: ‘Firstly, we’ve got to look after customers, we’ve got to make sure there’s a continuity of supply, and we’ve got to look after the most vulnerable – and particularly elderly – customers, that’s my first priority.

‘The second thing I’ve said is that I don’t think we should be throwing taxpayers’ money at companies which have been, let’s face it, badly run.’

He told Times Radio that ‘not every company’ could expect a Government bailout, but support could be available for larger firms.

‘Any support for those larger companies will be in terms of working capital, will be a loan, it won’t be just a grant, it won’t be just a blank cheque,’ he told the BBC.

Mr Kwarteng said he has held talks with fertiliser firm CF Industries, which has suspended operations because of the high cost of energy, leading to a national CO2 shortage.

The gas is used to stun animals prior to slaughter and also forms part of the protective packaging used to keep foods fresh.

Mr Kwarteng said he hoped to have a ‘very clear plan’ to get CO2 production back up and running this week.

He told Sky News he was ‘confident’ of a resolution and ‘it’s pretty imminent’, adding the CO2 situation was ‘critical’.

Ian Wright, chief executive of the Food and Drink Federation, said shoppers may notice that products are missing from supermarket shelves ‘in about 10 days’.

He told BBC Radio 4’s Today the potential shortages of CO2 supply were ‘a real crisis’ and said ‘the just-in-time system which underpins both supermarkets and the hospitality industry is under the most strain it has ever been in the 40 years it has been there’.

Mr Wright said that poultry production will begin to erode very seriously by the end of this week, with the same being true of pig production and the making of bakery goods. Meat packaging is probably only about a week behind, he added.

Millions of Britons have taken out attractive energy deals with firms that are now collapsing.

Under a ‘supplier of last resort’ system they are transferred to other stable firms – but their new terms are based on the cap level.   

That means they face the prospect of paying up to £400-a-year more almost immediately.  

The crisis is expected to hit huge numbers of people after wholesale energy prices went from a record low last May because of a lack of demand due to global lockdowns to the highest rates seen since the 1990s. 

Boris Johnson told reporters at the UN in New York last night that the government is ‘working very hard to find a way through’ but the chaos demonstrated the need to move to ‘clean, green sources of energy’. He compared the economic recovery after Covid to a ‘big thaw’ when pipes had been frozen.  

‘That’s when you have the problems and the leaks and all the difficulties, that’s really what’s happening to the global economy,’ the PM said.

‘It’s thawing very rapidly and you are seeing problems in the supply chains, very strong demand for gas around the world is producing this phenomenon but we’re going to fix it.’

Scott Byrom, Chief Executive Officer of TheEnergyShop.com, told MailOnline the 650,000 customers at the five energy companies to have folded in the past month were likely to be paying around £850-a-year for their energy because of the deals on offer in 2019 and 2020.

But they could immediately face a hike to £1,277 from October 1 due to the planned energy cap rise and may be paying as much as £1,500 by next April when they are moved to a new provider.

There are concerns that millions more people could be in the same situation after energy consultants Baringa predicted that the number of UK energy companies could fall from 49 to 10 in the next 12 months if wholesale prices remain the same. 

Experts have said that many of the companies that have gone bust brought in customers on ‘dirt cheap’ fixed deals on the back of low prices last year – but now have no hope of making any money so either folded or are seeking a Government bailout.

Ofgem will automatically move customers of Hub Energy, PfP, MoneyPlus, Utility Point, People’s Energy to a new supplier in the coming days with British Gas taking 350,000 of them today and EDF 220,000 last week. 

But energy market rules demand that customers whose supplier goes bust must be offered a fair deal by the new supplier – not the same one they had – meaning they are likely to pay significantly more. 

They will bring whatever credit they have on their accounts to a new provider, however.

Those affected can shop around for a new deal if they are unhappy with their new provider, but last year most energy firms were offering deals at £750 to £850-a-year – today there are now scarcely any deals under £1,200-a-year.

Stacey Stothard was one of 220,000 customer at Dorset-based Utility Point, which has gone bust. She believes her bill will now go up by up to £300 or more.

She told the BBC: ‘It is just like watching the meter go up and up. 

‘I did the right thing – not going for the cheapest deal, but choosing a company with a decent customer service record. 

‘I tried to protect myself from this turbulence. 

‘Now I’ve just had to order a lot of logs for the burner.’

The government’s cap is already rising by £139 to stop average standard variable tariff bills going above £1,277 from October 1, but energy experts have said the wholesale price rises mean the cap may have to be raised a further £280 in the new year. 

Emma Pinchbeck, chief executive of trade association Energy UK, said the immediate concern is about helping energy companies through ‘a really unprecedented time’.

She told GMB: ‘The immediate concern is about managing the vulnerability of our retail sector and making sure that customers are looked after through any unforeseen consequences of what is a really unprecedented time.’

Mr Kwarteng suggested that he is talking to Mr Sunak and Work and Pensions Secretary Therese Coffey on whether changes are needed to Universal Credit – with the £20 uplift brought in during the pandemic due to end.

He said: ‘You’re right to mention the National Insurance price tax rise, but of course that kicks in in April, so it’s not strictly a winter issue.

‘You’re also right to say that we face a global energy spike in terms of prices. But I’ve said that there are mechanisms in place now to protect consumers, I’ve been very clear that the energy price cap is staying even though some energy companies I read today are asking for it to be removed, I’ve been very clear that that’s staying, so we’re protecting customers there.

‘We’ve got the warm home discount, we’ve got winter fuel payments, which are again focused on the most vulnerable customers. So, we’re completely focused on helping vulnerable customers through this winter, particularly with regard to energy prices.’

A graphic illustrating how the three issues are currently affecting the UK and the problems it is causing. The People's Energy Company (bottom, middle) is one of the energy suppliers that have already gone bust

A graphic illustrating how the three issues are currently affecting the UK and the problems it is causing. The People’s Energy Company (bottom, middle) is one of the energy suppliers that have already gone bust

Grilled on the issue of Universal Credit, he said: ‘It’s a difficult situation, it could be a very difficult winter.

‘That’s why, as energy minister, I’m very focused on helping people that are fuel poor. Universal Credit, you will know, is an issue for the Chancellor and the Work and Pensions Secretary, I’m speaking to them a great deal about it.’

On CO2 supplies, Mr Kwarteng said any support would be ‘temporary’. 

‘Time is of the essence, and that’s why I spoke to the CEO, speaking to him twice in the last two days, and we’re hopeful that we can get something sorted today and get the production up and running in the next few days,’ he said.

Mr Kwarteng said ‘it will come at some cost… it may come at some cost, we’re still hammering out details, we’re still looking at a plan’.

But he added: ‘I have to say if there is support provided, that will be on a temporary basis, that’s not something that we want to do indefinitely.’

Two sites in Teesside and Cheshire, run by US firm CF Industries, produce around 60 per cent of the country’s CO2 as a by-product from the manufacture of fertiliser. 

The gas is vital to the supply of food and is needed by hospitals and the nuclear industry. 

It is used as a preservative in fresh food packaging and in the transport of frozen goods – in dry ice form.

It is also used to stun chickens and pigs prior to slaughter.  

Ministers and industry figures have said there is no risk of the lights going out this winter, with energy supplies secure despite the rising costs.

The outspoken boss of Octopus Energy, Greg Jackson, one of the ten companies expected to survive, has said that ‘idiot companies’ who offered customers rock bottom prices without allowing for rises in global prices ‘don’t deserve’ to survive.

He added: ‘Make no mistake – there are real issues in energy caused by global gas and shortfalls in UK nukes – but the idea of ‘crisis’ is being pumped up by the former Big 6 in order to try to bounce govt and regulators into restoring the cosy oligopoly they used to enjoy’. 

Experts have said that Britain’s energy regulator must take responsibility for the crisis because their decision to open up the market to break up the Big 6’s control of the market has led to too many companies entering the market.

There were just ten in 2006 but this reached 70 in 2018 and is at 49 today, but this could be back at ten again in a year.   

Scott Byrom, Chief Executive Officer of TheEnergyShop.com said: ‘The reality is that Ofgem relaxed the requirements for new market entrants and I don’t believe that they have looked as carefully as they should have at the financial and organisational set up of some of these energy companies as well as their hedging strategies’, adding that he believes the rise of prices has meant that often poorly run businesses have gone bust. 

Mr Kwarteng told MPs last night that there is no danger of the ‘lights going out’.

The Business Secretary hit back at ‘alarmism’ amid mounting concerns about the consequences of soaring wholesale gas prices – up 250 per cent since January and 70 per cent since last month – that are sending providers to the wall and causing chaos for a range of industries.

Experts say that as well as spiralling bills for household energy – which for some could nearly double by April –  food supplies and even medical procedures are at risk as the pressures cause shockwaves across supply chains.

One consultant said the problems are so huge they could ‘easily see a three-day working week’ across affected companies this winter, evoking memories of the carnage in the 1970s. 

Mr Kwarteng said last night: ‘The Government will not be bailing out failed companies. There will be no rewards for failure or mismanagement.

‘The taxpayer should not be expected to prop up companies which have poor business models and are not resilient to fluctuations in price.’

He went on: ‘While we are not complacent we do not expect supply emergencies, this is a very important point. This is not a question of security of supply.

‘The Great British UK gas system has delivered securely to date and is expected to continue to function effectively with a diverse range of supply sources and sufficient delivery capacity to more than meet the demand.’

Mr Kwarteng said: ‘We have sufficient capacity, and more than sufficient capacity, to meet demand and we do not expect supply emergencies to occur this winter

‘There is absolutely no question of the lights going out or people being unable to heat their homes. There will be no three-day working weeks or a throwback to the 1970s.

‘Such thinking is alarmist, unhelpful and completely misguided.’

The bullish stance comes after Iceland supermarket boss Richard Walker told the BBC this morning that he was ‘shocked’ by how exposed the UK was to disruption. 

The Government is preparing to take over the running of small suppliers on the verge of collapse due to the crisis, which has seen wholesale gas prices increase by 70 per cent in a month. Bulb, an energy provider to 1.7million customers, is reportedly seeking a bailout.

It is exploring raising funds from investors or a potential joint venture or merger with another company, according to the Financial Times. A Bulb spokesman said: ‘From time to time we explore various opportunities to fund our business plans and further our mission to lower bills and lower CO2.’

There are concerns that energy regulator Ofgem may be unable to find companies willing to take over customers’ accounts if gas prices continue to rise.

In that scenario the government having to effectively nationalise firms, appointing a ‘special administrator’. 

Meanwhile, ministers have rejected calls for green levies to be removed from energy bills. They can account for a quarter of electricity costs. 

E.on UK boss Michael Lewis wants the renewable energy subsidies to be funded through general taxation instead. He has said that removing such additional costs is a ‘short-term imperative’ to help consumers during what is ‘going to be a very challenging winter’. British Gas owner Centrica has backed his stance.  

Ofgem tracking of the day’s ‘spot’ price on natural gas underlines the sharp rise in costs 

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‘I was so proud to be Navajo and so proud to be Irish’

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“For the first time in my lifetime my two cultures were intertwined in the most beautiful way … I was so proud to be Navajo and so proud to be Irish.”

Doreen McPaul was speaking as she received a Presidential Distinguished Service Award for the Irish Abroad for 2021. President Higgins granted the awards to 11 people at a ceremony in Áras an Uachtaráin on December 2nd.

McPaul, of Irish and Navajo heritage, is attorney general for the Navajo Nation. Her award, under the category of charitable works, is in recognition of her fundraising for the Navajo, who experienced extreme hardship during the Covid-19 pandemic.

Her efforts led to a collaboration with the Irish Cultural Centre and McClelland Library in Phoenix, Arizona, which gathered more than $30,000 worth of donated supplies to assist the Navajo Nation at the peak of the pandemic.

“The Navajo Nation was so devastated by Covid-19, as a culture and as a community. [It] was really tragic and stressful, and we worked literally non-stop. The highlight of this was talking to people from all over the world …. Specifically with Ireland, we had this huge outpouring of support, and that was really overwhelming because of my own dual heritage and growing up as a half-Navajo half-Irish girl,” she told The Irish Times.

“As soon as people learned that the Navajo Nation attorney general was part-Irish, people reached out to me and claimed me as their own and invited me to all these things and celebrated my dual heritage in a way I’ve never experienced before. Literally they put me on the highest pedestal and that’s what this award signifies to me.”

A graduate of Princeton University, Doreen McPaul has worked as a tribal attorney for 20 years and has spent two years serving as attorney general. “I didn’t know I was nominated for the award first of all. So when the Irish council called to let me know I would be receiving a notice of the award, I literally cried.”

In all, 11 people received awards on Thursday, in a variety of fields. They were: Arts, Culture and Sport: Susan Feldman (USA), Roy Foster (Britain) and Br Colm O’Connell (Kenya). Business and Education: Sr Orla Treacy (South Sudan). Charitable Works: Doreen Nanibaa McPaul (USA), Phyllis Morgan-Fann and Jim O’Hara (Britain). Irish Community Support: Adrian Flannelly and Billy Lawless (USA). Peace, Reconciliation & Development: Bridget Brownlow (Canada). Science, Technology & Innovation: Susan Hopkins (Britain).

Colm Brophy, Minister of State for Overseas Development Aid and Diaspora said: “As Minister of State for the Diaspora I am aware of the profound impact our global family has had around the world in a variety of fields. There were 107 nominations for these awards this year, and the level and breadth of the achievements of the people nominated are, by any measure, remarkable.

The contribution of the Irish abroad has been immense, and the diversity of their achievements in their many walks of life, can be seen in this year’s 11 awardees.”

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Ski home values rise by up to 17% despite travel restrictions says Savills

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It’s not just Britain’s property market that is red-hot. Homes in ski resorts are being snapped up by wealthy buyers despite the pandemic and on/off travel restrictions, a new reports suggests.

And just like here, the staggering growth in values stems from high demand and lack of supply. 

The findings are in Savills latest ski report, which tracks 44 resorts globally. It found that property prices grew on average 5.1 per cent in the last year.

However, some resorts – including Flims and Grimentz in Switzerland – saw values rise 17 per cent.

This chalet in Chemin Des Cleves in Switzerland and is for sale for CHF6,000,000, the equivalent of £4.9million

This chalet in Chemin Des Cleves in Switzerland and is for sale for CHF6,000,000, the equivalent of £4.9million

Top 20 prime ski resorts, based on price per square metres (priced in euros)

Top 20 prime ski resorts, based on price per square metres (priced in euros)

The release of pent-up demand for ski properties follows almost two seasons of closures for most resorts.

Jeremy Rollason, of Savills, said: ‘Only a few resorts such as Val d’Isère, Verbier and Morzine were seeing real price growth up until 2019. 

‘That has all changed with virtually all resorts in the Alps and North America experiencing strong double digit and sometimes exponential price growth in a matter of months.’

He adds: ‘The first quarter of 2021 was particularly acute for demand. Transaction volumes doubled over the previous year and fierce competition emerged, especially for prime property in the most exclusive resorts.

‘Property that had previously been for sale for a few months – or even years – suddenly found buyers who were keen to escape the confines of towns and cities.’

The North American ski resorts of Aspen and Vail top the Savills Ski Prime Price League with Courchevel 1850 moving from the top spot to third place.

Aspen, which celebrates its 75th birthday this season, is predominantly a domestic market, with average values at around £25,000 per square metre.

Meribel has broken into the top ten price resorts with asking prices of around £13,800 per square metre. 

With its 200 lifts, and central to the world’s largest ski area – Les Trois Vallees – Meribel is popular among French and British skiers looking for a dual season resort.

Making the most of a dual season: This five-bed chalet is in St Gervais, in France's Haute-Savoie region, and is on the market for €2.5m (£2.13m)

Making the most of a dual season: This five-bed chalet is in St Gervais, in France’s Haute-Savoie region, and is on the market for €2.5m (£2.13m)

Estate agents Savills also looked at the prospects for price growth in 10 key resorts

Estate agents Savills also looked at the prospects for price growth in 10 key resorts

While resorts have always pushed the benefits of using properties throughout the winter and summer, a dual season resort is now the most important locational factor for buyers as they look to make the most of their holiday homes, according to Savills.

The estate agent said that regardless of international travel restrictions, foreign buyers are still keen to purchase ski resort properties and have been quick to return to the property market as restrictions have lifted.

This week, some resorts opened early amid heavy snowfall and are hoping to remain so throughout the season.

Mark Nathan, of Chalets 1066, the largest operator in France’s Les Gets, said: ‘We are fortunate here in that Jean-Baptiste Lemoyne, the French Minister for Tourisme has said that ‘closing is not an option’ this winter.

‘The snow is amazing at the moment and the pistes will be opening this weekend. The planned date was December 12 for early opening so this shows how good the conditions are. The fresh snow was up to my knees this morning.’

This five-bed chalet is in Saas-Fee, Switzerland, and is for sale for CHF4,200,000, the equivalent of £3.4million

This five-bed chalet is in Saas-Fee, Switzerland, and is for sale for CHF4,200,000, the equivalent of £3.4million

He explained that visitors will be expected to show proof of vaccination to go into bars and restaurants, and also when buying lift passes.

‘There might even be random checks in the lift queues. We are also expecting to have to use masks in lift queues – but these are all small points and the good news is we can all ski and enjoy a mountain holiday. 

‘Our bookings are the best we have ever had by a long way, in over 13 years of business. 

‘Over the past few days there has been nervousness among the English and a few other countries with the new Omicron variant, but we now hear that the Swiss will be allowing people who are on their way to France to land at Geneva and then take a transfer directly to France. 

‘Overall, we are looking forward to an exciting ski season.’

Qualified ski instructor and ski journalist Rob Stewart added: ‘British skiers spend more money than domestic visitors and ski resorts are desperate to have us back. 

‘In some French resorts, British skiers are only second to French visitors in regards to numbers and we are such an important part of their economy.

‘This winter, snow seems to have come fairly early and in decent quantities, and it’s cold. This always helps increase visitor numbers and after such a terrible winter last year because of Covid, there is huge positively about this winter being a good one.

‘The challenges remain for British skiers, with nerves around changing travel restrictions still haunting the industry and lack of availability pushing prices higher for the moment. 

‘But for skiers that have missed out for one and half seasons now, these challenges will be overcome if possible, for the chance to get back on the slopes’.

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Players should be allowed to compete in Saudi International

Voice Of EU

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Rory McIlroy has delivered a potentially crucial intervention on behalf of golfers wishing to compete in the Saudi International in February by insisting the PGA and European tours should not block them from playing.

The Saudi International, once of the European Tour but now an Asian Tour event, has confirmed a number of the world’s most prominent golfers – including Tommy Fleetwood, Bryson DeChambeau, Dustin Johnson, Phil Mickelson, Ian Poulter, Lee Westwood and Sergio García – have agreed to feature in 2022.

Saudi Arabia has sought to make inroads into professional golf but has encountered stiff resistance from the European and PGA tours. It has been reported both those bodies could trigger open warfare by refusing to grant releases to their members to play in Jeddah. The European Tour will discuss the issue at board level in the coming days.

McIlroy has no interest in accepting Saudi money but believes others should not be denied the opportunity. “I think we’re independent contractors and we should be able to play where we want to play,” he said. “So in my opinion I think the Tour should grant releases. It’s an Asian Tour event, it’s an event that has official golf world rankings.

“I do see reasons why they wouldn’t grant releases but I think if they’re trying to do what’s best for their members and their members are going to a place other than the PGA Tour and being able to earn that money, I mean, we’re independent contractors and I feel like we should be able to do that if that’s what our personal choice is. My personal choice is not to do that but obviously a lot of players are doing that and I think it’s fair to let them do that.

“My view as a professional golfer is I’m an independent contractor, I should be able to go play where I want if I have the credentials and I have the eligibility to do so. I’d say most of the players on tour would be in a similar opinion to me.”

The matter is further complicated by some players having signed multi-year deals to play in Saudi. McIlroy, 32, did admit the prospect of legal wrangling is an unappealing one. “I think the professional game needs to get to a point where we as professionals need to know where we stand,” he said. “Are we actually independent contractors? Are we employed by a certain entity? There’s a lot of grey area in that and that’s what sort of needs to be sorted out, I think.”

McIlroy’s curious competitive year will close at this weekend’s Hero World Challenge in the Bahamas. “I think it’s been a year where I’ve struggled in parts but I still got two wins on tour, which is pretty good,” the world No 8 said. “I was tied for the lead with nine holes to go in the US Open. I played well in parts, I just didn’t do it consistently enough. I go back to 2019 and had like 19 top-10 finishes or whatever it was; that’s the level I want to play at.” – Guardian

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