British industry leaders have urged Boris Johnson to stop his cabinet ministers bickering over how to address the soaring cost of gas, warning that factories will close unless the government intervenes.
The Department for Business, Energy and Industrial Strategy (BEIS) has been rowing with the Treasury over whether the government should support businesses struggling because of energy prices.
BEIS secretary Kwasi Kwarteng on Monday made a formal request to chancellor of the exchequer Rishi Sunak to help industries that use a lot of energy, including steel, paper and ceramics. The request followed a Treasury briefing accusing Mr Kwarteng of “making things up” after he claimed to be in talks with the chancellor over supports for industry.
Downing Street on Monday backed Mr Kwarteng, saying “ministers from BEIS are working across government, including with Treasury, on this important issue, the challenges that are currently facing industry in light of global gas prices, and that will continue”.
“With the reported government infighting between the Treasury and BEIS, the prime minister now needs to bang ministerial heads together, take control and remember that if he does nothing then his levelling-up ambition will be left in tatters,” he told LBC radio.
“I’m sure he can get on the phone and get talking to them, but to my mind now is not the time for a prime minister to be on holiday, from the steel sector point of view.”
The surge in gas prices has driven some British energy companies out of business, and Mr Stace said steelmakers were facing energy prices five times higher than last year.
“Longer and more frequent pauses in production are becoming a fact of life. These circumstances are simply not sustainable for the sector. We urge the Government to take action, as has been done in Italy and Portugal, to support the sector.”
Labour’s shadow chancellor Rachel Reeves has written to Mr Sunak, accusing him of being missing in action and calling on him to support industries most affected by the crisis.
“The government should be protecting and supporting them through a crisis which has come about from their own lack of planning. They have a duty to get an immediate grip on this situation, and businesses need reassurance that this is happening,” she said.
“It’s crucial to also see the government out reassuring the public that they won’t be hit with more rising costs as millions are left with less money in their pockets. Not doing so is looking increasingly out of touch.”
On Monday evening Mr Kwarteng struck a long-term deal to keep CF Fertilisers, a major supplier of carbon- dioxide, in business without a government bailout. The company’s plant in northeast England was reopened last month after the government paid tens of millions of pounds to compensate for the high cost of gas.