Treasury: Kwasi ‘makes things up’
Extraordinary clash sees the Business Secretary slapped down after hinting at bailout for firms struggling with bills
MINISTERS yesterday quashed hopes of a rapid bailout to help struggling firms survive the energy crisis.
Business Secretary Kwasi Kwarteng said he was looking to see whether ‘existing support’ was ‘sufficient’ despite warnings that some factories could shut in weeks.
But in an extraordinary briefing war, the Treasury accused him of ‘making things up’ by claiming its departments were in talks about helping industry.
Mr Kwarteng told Sky News he was ‘constantly’ in conversation with the Treasury to see what support can be given to manufacturers and energy firms.
But a Treasury source hit back, saying: ‘This is not the first time the [Business] Secretary has made things up in interviews. To be crystal clear, the Treasury are not involved in any talks.’
Firms have slammed ministers for failing to help protect companies from an energy price shock that could see factories shutting down within weeks.
Heavy-industry leaders, covering steel, brick manufacturing, chemicals, ceramics and papers, are furious at the inaction.
UK Steel director general Gareth Stace warned of possible ‘long-term damage’ to the industry. He said: ‘Currently, UK steelmakers face energy prices five times higher than the average of last year, in addition to remarkable price volatility.
‘As such, longer and more frequent pauses in production are becoming a fact of life. These circumstances are simply not sustainable for the sector. We urge the Government to take action, as has been done in Italy and Portugal, to support the sector.’
Dr Laura Cohen, chief executive of the British Ceramic Confederation, said: ‘I am really concerned that the Secretary of State hasn’t understood the urgency of what we’re asking for.
‘We need practical gas emergency measures that keep enough gas available and our factories going when supplies get tight.’
Mr Kwarteng guaranteed he will keep the energy price cap for consumers in place throughout the winter but said he will not ‘bail out failing energy suppliers’.
Asked if he had approached the Treasury about subsidies for industry, said: ‘No, I haven’t. We’ve already got subsidies in place and it’s very clear that a lot of those are working.’
Labour Treasury spokesman Bridget Phillipson called on the Government to ‘get a grip’. ‘The two key government departments responsible for the current cost of living crisis have spent this morning infighting about whether they were in talks with each other. What a farce,’ she said. ‘If government ministers can’t even tell the truth about each other, then what hope do we have for the challenges facing our country? We need urgent answers on who exactly is running the show.’
Liberty Steel has been given a £50 million cash boost by owners GFG Alliance in a lifeline for 660 jobs at its Rotherham plant, which has been shut since spring. GFG spokesman Jeffrey Kabel told the BBC last night: ‘The injection of £50million of shareholder funds into Liberty Steel UK is an important step in our restructuring and transformation.’
‘Who exactly is running the show?’
HEATING a home to the temperature where a person can stroll around in shorts is not an inalienable human right.
So Kwasi Kwarteng might have thought it reasonable to discuss whether people struggling to pay energy bills may wear a jumper for warmth this winter.
But with gas and electricity prices going through the roof, causing misery for millions, the clumsy comments risk appearing terrifyingly tone-deaf.
Not for the first time during a crisis, the Government resembles a rabbit trapped in the headlights.
While rising wholesale gas prices are beyond ministers’ control, mitigating any fallout isn’t. Which is why it is depressing to see the Treasury and Mr Kwarteng in a furious row over efforts to protect industry against an energy costs spike.
No bailout is on the table. But if firms are forced to shut, it will worsen shortages and add to mounting cost-of-living pressures – slowing the post-Covid recovery.
No one suggests answers are easy. But while the Prime Minister suns himself in Marbella, voters will be dismayed at the growing chaos at the heart of government.