Treasury and BEIS feuds leave industry waiting for emergency gas price support
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Quarrels between ministries over how best to support industries hit by soaring gas prices have left affected sectors waiting for help they say is urgently needed.
Earlier last week, Business Secretary Kwasi Kwarteng handed the Treasury a series of proposals to protect industries like chemicals, ceramics, paper and steel that depend on gas to produce their goods.
A government source at the time stressed the gravity of the situation facing these industries and how quickly they should be dealt with.
“Without urgent support to help UK industry deal with high global gas prices, factories will close, many for good, and thousands of jobs will be lost,” they told PoliticsHome.
Ministers were due to announce as early as last week a package of measures designed to support energy-intensive industries during the winter.
But ten days later, affected industries are still waiting to hear the government’s plans.
Several trade bodies told PoliticsHome that they had not received any updates since Kwarteng submitted his proposals to Sunak, with the Chancellor reportedly reluctant to provide financial support to companies spanning such a range of industries.
A government source insisted that the Department of Business, Energy and Industrial Strategy (BEIS) and Treasury officials were still discussing the proposals and that Prime Minister Boris Johnson had made it clear he wanted a urgent solution.
The same government source said an announcement could come before Sunak delivers his next budget and spending review on Wednesday.
Andrew Large, director general of the Confederation of Paper Industries (CPI), said the industry was “encouraged” that BEIS had shown it understood the need for urgent action.
However, he said the lack of action “implies that the urgency of the issue is not understood at the highest levels of government.”
Large added that the Treasury’s stated preference to use repayable loans to help energy-hungry sectors get through the next few months “would simply push the problem off for a short time until the loans have to be repaid.”
Kwarteng and Sunak were said to have been embroiled in a feud in the days leading up to the second of his proposals when a Treasury source apparently accused the Business Secretary of “making things up” when he said BEIS was in talks with the Treasury on how to deal with the energy crisis.
A Downing Street spokesperson weighed in behind Kwarteng’s account, insisting the two departments had worked “very closely, as the public would expect”.
Shadow Business Secretary Ed Miliband said “It is incumbent on ministers to act now to ensure that we do not see factories and businesses shutting down due to government failure.”
He told PoliticsHome: “It has been 10 days since the Secretary of Business submitted his urgent Treasury support package and all we have had is silence. Energy intensive businesses are basic industries in our economy. They deserve a government on their side, which is not missing.
“This energy crisis was made in Downing Street with the workers paying the price. Labor believes the government must accept the principle of supporting these industries during this crisis and must work with them to figure out how to get there. “
The Trésor and BEIS were asked for comments.
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