The Ministry of Finance’s source accuses the Minister of Economic Affairs of having talks about state aid for companies
Senior ministers were embroiled in an extraordinary dispute over the UK’s energy crisis yesterday when industry leaders warned factories could shut down in days without government assistance.
Rising wholesale gas prices, which have increased 250 percent since January, have marginalized energy-intensive industries. Economy Minister Kwasi Kwarteng said some companies will have to stop production unless a temporary bailout is carried out.
But just as Mr Kwarteng said he had been discussing with Chancellor Rishi Sunak what help the government could offer industry, the Treasury Department accused the minister of “making things up” and there had been no discussions about the current situation.
The bitter public argument came while Boris Johnson was out on vacation with his family, allegedly in Marbella.
The government last month sent a £ 30 million bailout to CF Industries, a northeast fertilizer company facing carbon shortages.
However, the blow from the Treasury Department suggests there will be no major bailouts for factories that will have to close due to rising gas prices.
The head of the UK steel industry asked why ministers were not taking action to deal with the “critical” situation and warned that without immediate help there would be “significant and permanent damage” to the country’s manufacturing sector.
On Friday, Mr. Kwarteng met with representatives from the paper, glass, cement, lime, ceramics, chemical and steel industries and factories were told that they would have to shut down tools “within days” due to rising costs.
An official gift said her “blood ran cold” on the state of affairs presented to the Secretary of Commerce.
Industry representatives called for subsidies and a limit on gas prices, which currently only apply to consumer bills, for companies. Mr Kwarteng said yesterday that he wanted to help the sectors through “existing programs”.
He told Sky News’ Trevor Phillips on Sunday there had been discussions “what this support might look like,” adding, “Of course, I’m talking to government colleagues, particularly at the Treasury, to find a way to do this.”
Mr Kwarteng denied a Sunday Times report that he asked the Chancellor for billions in support and told the BBC The Andrew Marr Show: “I did not ask for billions, we have plans in place. I am working very closely with Chancellor Rishi Sunak to get us through this situation. “
After this interview, Sky News quoted a Treasury Department source said: “This is not the first time the BEIS secretary has come up with ideas in interviews. To be clear, the Treasury Department is not involved in any talks. “
The fire quote was officially sanctioned, I understand.
A source from the Treasury Department refused to comment on this quote, but said: “The real position is that the Treasury Department / Chancellor has not been involved in any discussions about the current situation”.
Gareth Steel, UK Steel General Manager, told BBC News: “If the situation is critical, which I certainly know, why isn’t the government acting today on this issue for energy intensive sectors like steel.
“Because without that help, we will see significant and permanent damage to the UK steel sector today and for the next week or so.”
While the prime minister was on vacation, Labor accused the government of “dismissing” while “in a crisis it created”.
Mr Kwarteng could not guarantee that there would be no gas interruptions this winter, but insisted that the price cap for households would be maintained. He said, “I’ve made that very clear. The price cap is the greatest shield in relation to consumer prices. It won’t be postponed. “
Emma Pinchbeck, the executive director of Energy UK, said domestic energy retailers remain at risk from rising gas wholesale costs.
Since Mr. Kwarteng insists that the upper energy price limit for households remains in place, the providers are faced with the burden of absorbing the higher prices.
She told Sky News, “When we started we had around 50 suppliers and we expect more to leave the market… The question is how many fail at one time and whether or not our mechanisms that we oversee are in place or not customers when that happens, be ready for so many failures at once. “
Shadow Treasury Secretary Bridget Phillipson said: “The Prime Minister has gone on vacation, no one knows where the Chancellor is and this morning we learned that the Secretary of Commerce entered the realms of the imagination.”