Hopes of industry support amid energy crisis fading as Treasury deny being in financial assistance talks

Hopes of industry receiving support from the Government through the escalating energy crisis this winter have been dashed after the Treasury denied being in talks to provide financial assistance.

BBC handout photo of Business Secretary Kwasi Kwarteng appearing on the BBC1 current affairs programme, The Andrew Marr Show (BBC)
BBC handout photo of Business Secretary Kwasi Kwarteng appearing on the BBC1 current affairs programme, The Andrew Marr Show (BBC)

Business Secretary Kwasi Kwarteng suggested yesterday that he was working closely with the Chancellor and Richmond MP Rishi Sunak to help the industry, although Treasury sources have since said that no such talks have taken place.

Meanwhile, a top steel boss has warned that there could be “long-term damage” to the sector as a result of soaring gas prices, with manufacturers facing shut downs and potential issues with equipment.

Mr Kwarteng has been facing demands for a winter package of measures to prevent further interruptions to supply chains following a meeting with industry representatives on Friday.

He told the BBC’s The Andrew Marr Show yesterday: “I’ve 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.”

A Treasury source later said that the department “has not been involved in talks”.

Shadow Chancellor and Leeds West MP Rachel Reeves questioned what Mr Sunak is “actually doing” if not talking the unfolding crisis through with businesses.

Yesterday, she said: “If the Treasury isn’t in talks with (the Department for Business, Energy and Industrial Strategy) to help our vital industries during this Conservative government’s energy crisis, then why on earth aren’t they?”

Concerns are mounting for so-called energy intensive industries, which could have a major knock-on effect on the rest of the UK economy if forced to slow production or shut down. These enterprises, including steel making and manufacturing, have seen their costs soar in recent weeks as wholesale gas prices have spiked across the globe.

Mr Kwarteng was asked if he would give extra help to energy-intensive industries, but the Minister said: “No, that doesn’t sound like yes at all. We already have existing support and we’re looking to see if that’s sufficient to get us through this situation.”

Gareth Stace, the director general of UK Steel, said that producers are facing energy prices five times higher than the average of last year and called for action from the Government to mirror interventions elsewhere in Europe.

He added: “These circumstances are simply not sustainable for the sector. Failure to do so may result in long-term damage to the future of the steel industry in the UK.

"Heading into the winter months, increasing prices could result in extended shutdowns, damage to equipment, loss of export opportunities and market share at home, and a loss of talent and employment.”