Treasury slaps down Kwarteng in energy row
Business Secretary accused of ‘making up’ talks about bailout to keep factories open
THE Treasury last night accused the Business Secretary of making misleading claims about plans to offer an energy bailout to struggling factories.
Kwasi Kwarteng said he was in talks about support for businesses making products including steel, glass, ceramics and paper, only for Treasury aides to insist there were no discussions.
Major factories have said they could be days from closure because soaring energy costs have meant it is not profitable to stay open, unless the Government helps them with hundreds of millions of pounds to pay power bills.
The latest row involving Mr Kwarteng comes days after he was criticised by fellow Cabinet ministers for failing to act quicker to tackle the petrol shortages caused by panic buying.
Conservative MPS said the row was a typical example of squabbling between ministers when a Prime Minister was away. Boris Johnson is on holiday with his pregnant wife Carrie and one-yearold son Wilfred in southern Spain.
Last night one Red Wall Tory MP said the row was a test for the Government’s support for seats in the North: “You can’t level up if you end up levelling heavy industry in the North of England.” No10 declined to comment.
In television interviews yesterday, Mr Kwarteng admitted that factories facing closure due to soaring energy costs was now a “critical situation”.
Asked if he had asked for extra money from the Treasury to support the plants, he said: “I have not asked for billions. We’ve got existing schemes.
“I’m working very closely with Rishi Sunak, the Chancellor, to get us through this situation.
“I think he showed a great deal of flexibility when he allowed £500million to be dispersed by local authorities for vulnerable consumers and we’re working to see what we can do in terms of protecting industry.” However, Treasury sources issued a swift rebuke to Sky News: “This is not the first time the Beis [Business, Energy and Industrial Strategy] secretary has made things up in interviews. To be crystal clear, the Treasury is not involved in any talks.”
A source insisted to the Telegraph that the Treasury “is not in talks with anyone”. The source added: “We just haven’t seen any proposals. We haven’t been engaged in discussions. Beis are the ones in discussions.”
Sources close to Mr Kwarteng said last night that Treasury officials had been in talks with the business department, but that no request for funds had been made.
Mr Kwarteng and his team met businesses that use a lot of electricity, such as steel and glass factories, to discuss the crisis on Friday. The businesses are understood to have asked for hundreds of millions of pounds of support.
More meetings are planned between officials and industry this week. One source said the situation was “desperate – they are on the brink”.
One idea is to expand an energy compensation scheme for intensive energy users to businesses in other sectors that are currently not allowed to apply for help.
The Conservative Steel Caucus, an informal grouping representing a dozen Tory MPS with seats in the industrial North, is growing increasingly concerned. The group exchanged messages over Whatsapp on Saturday and are now seeking an urgent meeting with Mr Johnson.
To head off the concern among the Red Wall MPS, Lee Rowley, the steel minister, was due to hold talks with some of the Caucus members yesterday. Andrew Percy, whose Brigg and Goole constituency includes Scunthorpe Steelworks and several chemical
plants, said the question of whether industrial firms would be allowed to fail because of energy costs was now a test of the Government’s commitment to “levelling up” the North. Mr Percy said: “If the Government is serious about levelling up then people in the Treasury need to understand that much of the northern economy is underpinned by heavy industry.
“It is no good pretending that we can bury our heads in the sand to this problem or pretend in some way that industry just needs to do more itself.
“You can’t level up if you end up levelling heavy industry in the North of England. There appears to be a bias in certain parts of the Treasury against heavy industry, they are seeing it as something ‘of the past’. Nothing could be further from the truth.
“This is a very real problem that is in part the Government’s own making and therefore can only be solved with government intervention.”
Mr Johnson is reportedly staying in an area of southern Spain where Lord Goldsmith of Richmond Park, a government minister and a close friend of the Johnsons, owns an estate through a company. The house is said to sleep 13 and costs as much as £25,000 a week to rent although it is unclear whether the Johnsons are staying there. One Tory MP said: “These kinds of rows always happen when the PM is away.”
Mr Kwarteng also used an interview on Sky News to suggest that people should consider putting on more clothes to keep warm if they had trouble paying to heat their homes.
Asked if people should wear an additional woolly jumper and pair of socks, he said: “It’s up to people – it’s amazing how different people’s cold thresholds can be very different.
“Some people feel comfortable wrapped up in lots of different clothes, others wear relatively little – I think people should be sensible. I think people should do what they feel comfortable with.”
He added: “My job as an energy minister is not to tell people how many layers of clothing they should wear, that’s not really my job.”