Rishi puts block on Boris bailout

Sunak wins battle with Johnson over handouts for firms hit by energy crisis

ChANCELLOr rishi Sunak has blocked a multi-million-pound manufacturing bailout backed by Boris Johnson in a sign of rising Cabinet tensions.

It follows a spat with Business Secretary Kwasi Kwarteng, who told broadcasters last month he was in talks with the Treasury over a rescue deal for industries hit by soaring energy prices.

The claim prompted a stunning rebuke, with a source from Mr Sunak’s department accusing Mr Kwarteng of ‘making things up in interviews’.

however, the Chancellor faced embarrassment after the Prime Minister sided with the Business Secretary.

No10 ordered the two departments to work together on a possible solution, which led to Mr Kwarteng submitting a proposal for taxpayer cash.

Options put forward included Government-backed loans and subsidies on energy prices for struggling firms.

Mr Johnson was understood to have been convinced that sectors including steel, chemicals and ceramics needed help and

‘Prime Minister has confidence in No11’

was preparing to sign off a bailout worth hundreds of millions of pounds.

But the Daily Mail can reveal that Mr Sunak has successfully stopped the plan, which is no longer being considered.

Government sources confirmed that with energy prices falling in recent weeks from record highs there were was little chance it will be resurrected.

It comes as senior Conservative MPs nicknamed the ‘men in grey suits’ went to see Mr Johnson in Downing Street yesterday amid continuing unrest in party ranks at the Government’s performance.

Sir Graham Brady, chairman of the 1922 Committee of Tory backbenchers, confirmed that the executive had met the Prime Minister in No10 but declined to comment on their discussions.

The meeting comes after a difficult few weeks for Mr Johnson, beginning with his botched attempt to overhaul standards rules for MPs, which led to renewed accusations of Tory ‘sleaze’.

This was followed by criticisms that long-awaited announcements on rail improvements for the North and Midlands and the funding of adult social care in England failed to match previous promises. Events culminated with Mr Johnson’s rambling speech to the CBI in which he mislaid part of his text and talked about his visit to the Peppa Pig World theme park.

There have been reports that Tory whips believe a number of MPs have submitted letters of no confidence in Mr Johnson to Sir Graham – although they remain far short of the 54 required under Conservative Party rules to trigger a vote on his leadership.

Yesterday, Downing Street sought to play down reports of tensions between Mr Johnson and Mr Sunak following claims that the Chancellor was becoming increasingly frustrated with the ‘chaotic’ operation at No10. The Chancellor’s chief of staff, Liam Booth-Smith, has been blamed by some for a toxic anonymous briefing that there was ‘a lot of concern in the building’ about Mr Johnson – although the Treasury has robustly denied that he was behind the quotes given to the BBC.

The Prime Minister’s spokesman insisted No10 and No11 ‘continue to work together very well at all levels’. Asked if the Mr Johnson had confidence in Mr Booth-Smith, his spokesman said: ‘Of course, the Prime Minister has confidence in the team at No11.

They work very closely together delivering on the public’s priorities.’