Business Secretary Kwasi Kwarteng has floated a plan to the Treasury in a bid to canvass support for industries sorely affected by soaring energy prices.
SurgeZirc UK reports that the cabinet minister on Monday presented a formal request to Rishi Sunak’s department requesting assistance for energy-intensive industries as tensions over job losses intensify.
Even though details of Kwarteng’s proposal remain sketchy, it is understood that the plan might involve issuing state-backed loans to companies to prevent them from folding up their operations over a winter period that would experience high energy prices.
According to The Times, an announcement could be made this week and the total package is expected to run into hundreds of millions of pounds.
Kwarteng, who has engaged in a series of talks with the industry since last week is expected to hold further deliberations with some business leaders this week.
The proposal comes in the wake of a feud between Treasury and the Business department, with Kwarteng accused of “making things up” during broadcast interviews after he hinted that Treasury had been involved with talks over support.
“This is a significant challenge, and there’s work across government to mitigate it,” the prime minister’s official spokesperson said.
They did not however clarify whether “mitigations” would include financial support, saying: “I’m not going to jump ahead of any future conversations.
“It’s right that we continue to listen carefully to what industry are saying and have talks across government about whether any action is needed to mitigate the challenges.”
Lord Agnew, Tory frontbencher on Monday said the rising energy costs did not necessarily imply supply shortages but were due to a “geopolitical move” by Russia to put pressure on Europe.
The Treasury minister’s, without mincing words, blamed Russia for the soaring energy costs.
“The current squeeze on gas prices is nothing to do with the quantity of gas available,” he told peers in the House of Lords. It is a geopolitical move by Russia to put pressure on Europe and we are caught up in that. Public ownership of our own utilities would make no difference.”
Shadow Chancellor of the Exchequer and Labour party’s Rachel Reeves in a letter to Chancellor Sunak implored Treasury to render assistance to energy-intensive industries.
Reeves said Sunak has been “missing in action” over the crisis.
“A temporary increase in energy prices must not mean great industries like steel, ceramics, glass, paper and chemicals disappear, just because they happen to be intensive users of energy,” the shadow chancellor said.
Also calling on the government to “get an immediate grip” on the situation, Reeves added: “Turning our backs on them would mean losing almost half a million jobs. It would mean ripping out the foundations underpinning the wider UK economy, holding back jobs and growth for years to come.
“It would be terrible value for money, as we would have to turn to expensive imports to meet our needs for the goods these sectors produce.
“At this crucial time, government ministers should be working together to fight for British jobs and industries, rather than fighting each other.”