Supply chaos exposed

The Government has refused to bail out small energy companies faced with collapse as a result of the rapid rise in gas prices. But it has stepped in to help a US company that supplies 60 per cent of the UK’S food-grade carbon dioxide without which poultry and other meats cannot be kept for any length of time.

Kwasi Kwarteng, the Business Secretary, has offered short-term financial help to CF Industries which has stopped production at its two fertiliser plants. CO2 is a by-product of fertiliser manufacturing. With food companies warning the Government that it had only days to act to prevent shortages, Mr Kwarteng has acted with commendable speed in putting the rescue package together. But this episode has again highlighted the extreme vulnerability of the UK’S supply chains.

Who knew that nearly two-thirds of the country’s entire CO2 production was in the hands of one foreign-owned company? As we have seen with the pandemic, what in normal times look to be prosaic enterprises turn out to be crucial when a crisis hits. The dearth of personal protective equipment (PPE) at the start of the pandemic demonstrated the importance of keeping stockpiles and not always relying on seat-of-thepants provision. The same can be said about the closure of the UK’S biggest gas storage facility in the North Sea.

Ministers argue that “just in time” supply chains cut out waste and keep down prices. But this is a false economy if the cost of acquiring PPE or gas on a world market soars into the stratosphere. An urgent inquiry is needed into whether the country has been left exposed to events beyond its control.