Kwasi Kwarteng has made a formal request to the Treasury for support to industries hit by high energy prices, Sky News understands.
Sectors such as paper, steel and ceramics manufacturing had called for a price cap otherwise they said they may be forced to halt production, but talks with the government at the end of last week failed to reach a solution.
Mr Kwarteng pledged to keep the energy price cap in place for private households but has offered no new support for businesses as prices soar due to a shortage of natural gas in Europe.
Business secretary on gas prices cap and fuel costsLeaders of the UK’s energy intensive sectors held talks with Mr Kwarteng on Friday and Monday in which they emphasised the “seriousness of the situation facing energy intensive industries this winter”.
The Energy Intensive Users’ Group (EIUG) said it was “optimistic” its main request for “cost containment” – a price cap” will be part of the plan to help them.
AdvertisementDr Richard Leese, EIUG’s chair, said: “The urgency shown by the Secretary of State in holding further talks today is therefore welcome.
“The involvement of other parts of government will also be required. EIUG is looking for an equally swift response from Her Majesty’s Treasury.”
More on Energy Related Topics: EnergyKwasi Kwartengsupply crisisMr Kwarteng’s request comes after a row in which the Treasury denied it was in discussions with the Business Secretary, but Home Office minister Damian Hinds said Mr Kwarteng had not lied when he claimed his team was in discussions with the Treasury.
A Treasury source told Sky News on Sunday they are “not involved in any talks” and added that it was not the first time Mr Kwarteng “has made things up in interviews”.
Tensions between business department and Treasury continue after ‘brutal slapdown’
On Monday, a source at the Department for Business, Energy and Industrial Strategy told Sky News that comment was “dreadful”, adding: “I get that they’ve got a difficult role with lots of spending demands but there was no need for a brutal slapdown.”
Mr Hinds said of the row: “These unnamed sources stories come out from time to time.
“The fact is government departments, government ministers, talk to each other the whole time and of course with an issue like this, with these rising global prices and business having to grapple and deal with it to make sure they break even and can make a margin of course that is something that the business secretary – and of course the energy secretary – is going to be totally focussed on.
“Something that the Treasury, of course, is also very focussed on as the economic management department of the nation.”
Will the UK have a winter crisis?Speaking to reporters at a regular Westminster briefing, the PM’s spokesman insisted work on supporting businesses was happening across government departments.
“As you would expect, 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.”
Asked to characterise the relationship between BEIS and the Treasury, the spokesman said they “continue to work very closely together, as the public would expect”.
Mr Kwarteng made the claim in an interview with Trevor Phillips on Sunday, in which he also said he is “convinced” the UK will not suffer gas shortages in the coming months – and insisted that a price cap on consumers’ energy bills “will not be moved” this winter.
The Business Secretary said he was “convinced we will have full energy supply” despite soaring wholesale gas prices around the world – although he stopped short of offering a full guarantee that there would not be disruption.
Twelve UK energy providers have collapsedMr Kwarteng added that he was “speaking constantly” with industry on their energy needs and pricing and was “engaging” with the Treasury on the issue.
But he said he had not asked for subsidies for businesses, adding: “We’ve already got subsidies in place, and it’s very clear that a lot of those are working.
“On the consumer side we’ve got an energy price cap and on the industry side we have measures where we support industries, heavy electricity users.
“What I’m very clear about is we need to help them get through this situation – it’s a difficult situation, gas prices, electricity prices are at very high levels right across the world and of course I’m speaking to government colleagues, particularly in the Treasury, to try and see a way through this.”
Labour’s shadow economic secretary to the Treasury Pat McFadden said the “unseemly squabble” was “extraordinary”.
“We’ve got a jobs crisis facing a number of energy intensive industries like steel, ceramics, paper-making and so on,” he told Kay Burley.
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“They’re asking the government for help and instead of their concerns being addressed, what we’ve got is this unseemly squabble between the Treasury and the business department.
“Where the Treasury have not only accused the business secretary of making things up, but they’ve gone out of their way to say that they’re not involved in any talks about helping these industries.
“If they’re not involved they should be.
“Up until now we’ve been focused on the impact of all of this on domestic consumers and that’s understandable, but this is now a jobs crisis facing key UK industries.”
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Gareth Stace, director general of UK Steel, told Sky News the row was a distraction and the PM had to act to help the industry before it is “too late”.
“We hear these reports of a spat between the business department and Treasury. I want the prime minister himself to bang ministerial heads together to step into this, to take direct action himself to address the exorbitant gas and electricity prices facing us, which could damage us,” he said.
The government has appointed a former boss of Tesco as an expert supply chain adviser as it bids to avert a crisis for deliveries in the run-up to Christmas.
Asked how confident he was about addressing supply chain problems, Mr Lewis told reporters: “It’s the first day in the office, so let me go and have a look.”
Asked if Britain was heading for a bleak winter, he replied: “I don’t think so, but let me go and see what we can find.”
