Treasury plays down hopes of financial support for factories in energy crisis

 Treasury plays down hopes of financial support for factories in energy crisis

The Treasury has played down hopes that major factories and chemical plants could receive support packages to help them cope with the energy crisis this winter.

There were warnings on Sunday that some factories are “days away” from having to stop production because energy bills have quadrupled this year.

Kwasi Kwarteng, the Business Secretary, appeared to offer some hope when he suggested a financial package might be forthcoming. 

Mr Kwarteng acknowledged that it was a “critical situation” but denied he had requested billions of pounds of support when asked whether he was considering a price cap or winter package for businesses.

He told the BBC’s Andrew Marr Show: “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.”

Hinting at a new financial package, the Business Secretary added: “I think he showed a great deal of flexibility when he allowed £500 million to be dispersed by local authorities for vulnerable consumers, and we’re working to see what we can do in terms of protecting industry.”

But a senior Treasury source said no talks about a financial package have taken place, despite firms pleading for help to prevent further collapses as wholesale gas prices spiral.

The source told Sky News: “This is not the first time the BEIS Secretary has made things up in interviews. To be crystal clear, the Treasury is not involved in any talks.” Another source told The Telegraph: “The Treasury has not been involved in talks.”

Mr Kwarteng said he was certain the lights would stay on in the UK this winter as businesses warned they may have to reduce working hours to sustain themselves and industry body Energy UK said more suppliers would collapse.

The Business Secretary also guaranteed that he would keep the energy price cap for consumers in place throughout the winter but said he would not “bail out failing energy suppliers”.

He said he could not yet determine whether a price cap would be introduced for businesses but added that there have been discussions over “what the nature of support might be”.

“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,” he said.

Mr Kwarteng faced demands for a “winter package of measures” to prevent further interruptions to supply chains during a meeting with industry representatives on Friday.

Richard Leese, the chairman of the Energy Intensive Users Group, told the BBC: “It’s needed absolutely right now – gas prices are at an unprecedented level and the businesses that manufacture the goods that we need are trying to operate under these unprecedented conditions.”

Emma Pinchbeck, the chief executive of Energy UK, also warned that “exposed” businesses such as energy-intensive users and retailers would be worst hit.

She said: “We are expecting more retailers to go out of business this winter. The issue is how many are failing at once and whether or not our mechanisms, which are in place to look after customers when that happens, are up for that many failures in one go.”

Asked whether he was absolutely sure the lights would stay on this winter, Mr Kwarteng said: “Yes, I am.”

Earlier, Mr Kwarteng had written in the Sunday Express that keeping the price cap unchanged ahead of its next scheduled change in April was “non-negotiable for me”.

He argued that the cap would hold back instant bill rises for millions of customers, but some company bosses have argued that the move will ultimately be costly for taxpayers.

Mr Kwarteng also suggested people could wrap up warmer this winter rather than use more energy. Asked whether he was advising people to wear another woolly jumper and pair of socks, he told Sky: “It’s up to people – it’s amazing how different people’s cold thresholds can be.

“Some people feel comfortable wrapped up in lots of different clothes, others wear relatively little – I think people should be sensible. I think people should do what they feel comfortable with.”

But he insisted he was not telling people to turn down their thermostats, adding: “My job as an energy minister is not to tell people how many layers of clothing they should wear – that’s not really my job.”

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