Centrica's deal with the US is important - but we won't feel the benefits for aeons

It's a start, but just a start.

Today Centrica struck a £10bn supply deal with the US  - describing it as a "landmark agreement".

"This... represents a significant step forward in our strategy, enabling Centrica to strengthen its position along the gas value chain and helping to ensure the UK's future energy security," said Sam Laidlaw, Centrica's chief executive in a statement.

Just how landmark is it? Well, it's effectively the first time the UK has signed a gas import deal with the US - so it's important for a number of reasons.

US natural gas prices are very much cheaper than those in the UK and Europe - around a quarter to a fifth. Here's the thing though: this deal won't lower UK prices all that much, as although the price of the contract is indexed to the US gas market, there is a significant fixed fee on top, which roughly doubles that price. In addition, the volumes of gas involved aren't big enough to have much of an impact on price anyway.

But the important thing about this deal is that it's the first - and therefore a gateway for all sorts of similar contracts.

"More and more deals will get signed with the US from Europe" says Jonathan Lane, Head of Power Consulting at GlobalData. "This will push the US price up, and the European price down. Natural gas prices will eventually harmonise".

The other benefit of the deal is one of security. At the moment the UK relies on a small number of gas suppliers - and heavily on Qatar. The contract with the US will bring some diversity, increasing potential sources and energy security if a pipeline fails.

This is all set very much in the future though - the first shipments aren't due until 2018, so the current strain on our gas supplies may continue for a while.

More on this here.

 
Photograph: Getty Images
Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
Show Hide image

Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

0800 7318496