Ministers strike deal to avert crisis in shops
Taxpayer cash to rescue CO2 firms in energy price squeeze
MINISTERS last night struck a taxpayer-funded deal to avert supermarket shortages as business leaders warned that problems remain due to labour shortages.
Soaring gas prices have left energy companies struggling and led to two US-owned fertiliser manufacturing plants shutting down because they cannot operate at a profit.
The Teesside and Cheshire sites, run by CF Industries, supply 60 per cent of Britain’s CO2 gas – which is essential for food production and packaging.
CO2 is used for everything from the humane slaughter of chickens and pigs, to putting the fizz in soft drinks and creating packaging that keeps foods fresh.
It is also critical for cooling nuclear reactors and keeping certain medicines and vaccines cold.
Industry leaders had warned that the shortage could bring the meat processing system to a halt.
But it is understood that Business Secretary Kwasi Kwarteng yesterday clinched a deal with the factories to resume production from as early as today.
The news came as Boris Johnson last night insisted ‘Christmas is on’ – despite fears the rising cost of living, job insecurities and food shortages could ruin festivities.
The Prime Minister told ITN: ‘The spikes in gas prices, like many of the other supply issues we are seeing, including food, are caused by the world economy waking up after a long time in this suspended animation caused by Covid. We will do whatever we can to address the supply issues but this is a short-term problem.’
Mr Kwarteng was less optimistic yesterday, admitting that millions of families were facing a ‘very difficult winter’.
Under his CO2 deal – a shortterm arrangement expected to last weeks – the taxpayer will financially support suppliers’ factories so they can operate again.
The British Retail Consortium (BRC) welcomed the resolution of the crisis, but food industry leaders said problems remain because of a massive shortage of labour, from pickers and packers on farms, to workers in meat processing and delivery drivers.
Andrew Opie, director of food and sustainability at the BRC, said: ‘It is vital that production at the Cheshire and Stockton-onTees plants is restarted as soon as possible.
‘To support this issue, and other supply chain disruption arising in recent weeks, the Government must also find a solution to the shortage of HGV drivers.
‘Retailers are helping to train tens of thousands of new British delivery drivers, but the Government must keep its foot on the gas by introducing temporary work visas to allow drivers from abroad to fill the gap.’
British Poultry Council chief executive Richard Griffiths said CO2 production should be considered something that is in ‘the national interest’ and prioritised and financially supported by the Government to keep food supplies moving.
Gavin Partington, director general of the British Soft Drinks Association, warned shortages are still likely. ‘With the likelihood it may take days for production to resume, combined with HGV driver shortage issues, it’s possible supply of certain products won’t be as abundant as usual over the next week or so,’ he said.
It came as the International Energy Agency called on Russia to send more gas to Europe.
It is the first major international body to address claims Moscow has restricted supplies.
The Paris-based group, which advises on energy policy and security, said while Russia was fulfilling long-term contracts to European customers it was supplying less gas to Europe than before the pandemic.