Kwarteng lobbies Treasury for energy bailout
Business Secretary seeks to support firms suffering from high prices and denies tension with Sunak
KWASI KWARTENG has submitted proposals to the Treasury for a bailout package worth several hundred million pounds to help energy-intensive industries suffering from soaring costs.
The Business Secretary is understood to have sought temporary subsidies for sectors including steel, glass, ceramics and paper that have been hit by the wholesale price of gas more than quadrupling in the past year. The Treasury acknowledged receipt of his submission, which officials are examining, but warned that any financial support for business had to take into account the impact on the taxpayer.
“We will do what is in the best interest of both consumers and taxpayers,” a Treasury spokesman said.
Mr Kwarteng held talks with industry leaders last week, and ministers and officials are to continue speaking to businesses over coming days.
Industry chiefs have issued an array of demands to the Government, spanning loans, tax cuts and the suspension of red tape, amid concerns about factory closures and job losses.
Dave Dalton, chief executive at British Glass, told Times Radio that a quarter of the jobs in the glass sector, which employs 6,000 people directly and up to 120,000 people more widely, were at risk unless the state intervened to help.
Officials at the Department for Business, Energy and Industrial Strategy (Beis) have kept details of their proposals to the Treasury confidential. It is thought that calls for an energy price cap for industry, as exists for households, do not form part of the blueprint.
Mr Kwarteng won the backing of the Prime Minister yesterday after tensions with Rishi Sunak became public on Sunday with hostile briefing from the Treasury.
No 10 suggested that Boris Johnson could back a bailout, with his spokesman saying that the Government has already provided “extensive support”, including £2billion through the electricity price relief scheme. “We’ll continue to discuss whether any work is needed,” the spokesman added.
Sources from the Chancellor’s department had accused the Business Secretary of having “made things up” after Mr Kwarteng indicated in an interview that he was in talks with the Treasury about a financial bailout for struggling factories.
Downing Street confirmed that both the Treasury and Beis were indeed looking at how to support firms struggling with rocketing energy prices.
Mr Johnson’s spokesman said that the two departments “continue to work very closely together”.
Mr Kwarteng sought to defuse the quarrel as he was approached by Sky News. Asked whether he was rowing with the Chancellor, he insisted “not at all” and added: “We get on very well.”
Gareth Stace, director-general of UK Steel, called on Mr Johnson to “bang heads together” to avoid an industry crisis hitting his sector.
In a second boon for the Business Secretary yesterday, he announced that the carbon dioxide industry had struck an agreement on price with the companies it supplies to keep manufacturers operational while gas costs remain high.
The deal came after the Government agreed a three-week bailout for CF Fertilisers, which supplies about 60 per cent of Britain’s carbon dioxide, to ensure businesses in the food processing sector and beyond did not run short.
No 10 said that the UK exposure to the global gas price rise underscored “the need to move away from fossil fuels towards a low carbon energy system” as the best way to protect consumers.
However, Tory MPS called on the Government to eschew subsidies and liberalise constraints on energy markets. Marcus Fysh, chairman of the Economic Growth group of Tory MPS, argued that to “subsidise energy throughout the economy at vast cost to the public finances” was a “very, very bad” idea.
A Government source defended Mr Kwarteng as “one of the most free market MPS the party has”, stressing that any state support would be focused on helping “a small section of certain factories” suffering from short-term problems caused by energy prices.