Heavy industry bosses have piled pressure on the government this morning to provide emergency cash to manufacturers struggling to cope with surging energy costs.
Business secretary Kwasi Kwarteng yesterday said he was in talks with Treasury to provide emergency funding to heavy industry firms, however the claim was quickly slapped down by anonymous sources at the Treasury.
A Treasury source said Kwarteng had “made up” the talks.
The row has left industry bodies this morning desperate for clarity around whether the government will come to the rescue of manufacturers that are being driven to the brink by surging energy costs.
Gas prices have risen by more than 250 per cent since January, which has seen 12 challenger UK energy firms go bust this year.
This has put serious pressure on many industrial firms that are high energy users as they do not benefit from the energy price cap afforded to households.
Director general of UK Steel Gareth Stace told Times Radio that Boris Johnson needs to “bang ministerial heads together, and take control himself as the Prime Minister”.
He is calling for the government to cut “policy costs” around “carbon costs, renewables, capacity and network charges”.
“The government could press a button, pull a lever, and address those additional costs that our competitors don’t pay,” Stace said.
“And then secondly, address the wholesale price. And that is in the short term, temporary, saying to government, provide us with a certain amount of capacity at a competitive price in that short term that will get us over this energy crisis now.
“If you don’t do this now, then what is an energy crisis today could turn into a steel industry crisis in the future.”
Kwarteng met last week with bosses from large industrial firms, who have sounded warnings they could go broke due to surging natural gas prices.
The business secretary reportedly wants to pump subsidies into manufacturers – such as those in the paper, glass, cement, lime, ceramics, chemicals and steel industries – to keep them afloat.
Kwarteng said he was having these discussions with the Treasury, however a department source told Sky News yesterday: “This is not the first time the Beis secretary has made things up in interviews.
“To be crystal clear the treasury are not involved in any talks.”
Dave Dalton, chief executive at British Glass told BBC Radio 4 that he and other industry bodies asked for immediate support on Friday.
“We didn’t get to specifics, the meeting was very much an introductory one, and we had rather hoped over the weekend and today that that dialogue would be extended,” he said.
“It’s very alarming to hear the Treasury are making denials over the approach, let alone anything else. We need immediate action.”
Home Office minister Damian Hinds told Sky News today that Kwarteng had not lied when he said he was in talks with the Treasury over emergency funding for high-energy manufacturers.
This is despite Treasury sources doubling down on the claims last night.
“These unnamed sources stories come out from time to time,” Hinds said.
“The fact is, government departments, government ministers, talk to each other the whole time, and of course with an issue like this, with these rising global prices and business having to grapple and deal with it to make sure they break even and can make a margin, of course that is something that the business secretary – and of course the energy secretary – is going to be totally focused on.”