Fears thousands of jobs will go at factories hammered by soaring energy costs

Kwasi Kwarteng today risked inflaming a bitter spat with Rishi Sunak by formally demanding emergency funding stop ‘household name’ firms being crippled by soaring energy prices.

The Business Secretary has officially asked for funding after the Treasury dealt him an extraordinary slapdown yesterday by denying his claims they were in talks about a package.

The nature and extent of the support is yet to be thrashed out, but sources warned that usually-profitable companies in energy-intensive industries such as steel, chemicals and glass are on the edge. 

‘This is not about 1970s style bailouts. This is about recognising that a lot of companies are facing pressure,’ one source told MailOnline. ‘Household names are in trouble.’  

The move comes as Boris Johnson faces growing unrest from Tory MPs amid fears thousands of manufacturing jobs could go in crucial northern seats, with global demand and supply chain issues after the pandemic sending prices of oil and gas spiralling. 

Angry business leaders have insisted the PM should be ‘banging ministerial heads together’ over the response to the looming ‘winter of discontent’, instead of sunning himself on holiday at a £25,000-a-week private estate near Marbella. 

Chaos broke out in Whitehall yesterday over whether there would be a rapid bailout to help struggling firms survive the energy crisis.

Mr Kwarteng said he was looking to see whether ‘existing support’ was ‘sufficient’ despite warnings that some factories could shut in weeks. But in an extraordinary briefing war, the Treasury, run by Mr Sunak, accused him of ‘making things up’ by claiming its departments were in talks about helping industry. 

Tory MP Andrew Percy – who has a steelworks in his Yorkshire constituency – urged ministers to ‘grow a pair’ and step in.

‘If the government doesn’t intervene here then it will amount to an abandonment of the north and midlands, where heavy industry and manufacturing is primarily located,’ he told the Times.

There are also claims the the Conservative Steel Caucus, which includes around a dozen Tory MPs with industrial seats, has been making increasingly desperate representations behind the scenes. 

In other worrying developments in the energy crisis today:

  • Qatar, the world’s largest seller of liquefied natural gas (LNG), told consumers it was powerless to cool energy prices;
  • Oil prices topped $84 a barrel for the first time in three years as the energy crisis gripping major economies intensified; 
  • The Government has brokered a deal with the carbon dioxide (CO2) industry to ensure supplies continue to be available; 
  • Ministers are being urged to impose windfall tax on firms making huge profits from gas price surge.
Rishi Sunak

Rishi Sunak

Business Secretary Kwasi Kwarteng

Business Secretary Kwasi Kwarteng

Business Secretary Kwasi Kwarteng and Chancellor Rishi Sunak are in a spat oversupport for energy-intensive industries 

Boris Johnson and his pregnant wife Carrie are taking a foreign break at a £25,000-a-week Marbella hideaway owned by the Prime Minister's wife's close friend and Tory peer Zac Goldsmith

Boris Johnson and his pregnant wife Carrie are taking a foreign break at a £25,000-a-week Marbella hideaway owned by the Prime Minister's wife's close friend and Tory peer Zac Goldsmith

Boris Johnson and his pregnant wife Carrie are taking a foreign break at a £25,000-a-week Marbella hideaway owned by the Prime Minister’s wife’s close friend and Tory peer Zac Goldsmith

Boris Johnson is sunning himself in Spain as Britain is in the midst of energy, petrol and supply chain crises

Boris Johnson is sunning himself in Spain as Britain is in the midst of energy, petrol and supply chain crises

Boris Johnson is sunning himself in Spain as Britain is in the midst of energy, petrol and supply chain crises








Soaring gas prices are a ‘geopolitical move’ by Russia to bully Europe 

Soaring gas prices hitting industry and householders in the pocket have been blamed squarely on the Kremlin by a government minister.

Tory frontbencher Lord Agnew of Oulton said spiralling energy costs were nothing to do with supply shortages, but were due to a ‘geopolitical move’ by Russia to put pressure on Europe.

The Treasury minister’s unequivocal comments appeared to go further than the Government has gone before in pointing the finger directly at Moscow for the current crisis.

It follows claims that Russia had been limiting gas supplies in a bid to prod regulators in Europe into moving quickly to certify the controversial new Nord Stream 2 pipeline.

Last week, a suggestion by Russian President Vladimir Putin that his country could boost natural gas supplies to Europe led to a drop in prices.

Pressed in the House of Lords over rising energy costs and calls for increased intervention and public ownership of ‘vital utilities’, Lord Agnew said: ‘The current squeeze on gas prices is nothing to do with the quantity of gas available.

‘It is a geopolitical move by Russia to put pressure on Europe and we are caught up in that.

‘Public ownership of our own utilities would make no difference.’

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Gareth Stace, the director general of UK Steel, told LBC: ‘This is a critical time. The Business Secretary has also said it’s a critical situation, and therefore why is Government just sitting on its hands and doing absolutely nothing at the moment?

‘From my point of view, today, 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.’ 

But defending the PM’s holiday Security Minister Damian Hinds said: ‘What is important for the rest of us actually, for the whole country, is that the Prime Minister does get to have some family time, does get to have a break’.

Downing Street would not be drawn at lunchtime on whether Mr Kwarteng and Mr Sunak are working together on solving the crisis, insisting that work is happening across the Government. 

The PM’s spokesman said: ‘As you would expect, ministers from BEIS (Department for Business, Energy and Industrial Strategy) 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 how he would characterise the relationship between the two departments, the spokesman said they ‘continue to work very closely together, as the public would expect’.   

Experts say that Tory seats taken from Labour at the latest election won’t stay blue for long if thousands of jobs start going in factories producing steel, glass, chemicals and building materials.

Mr Stace said he wants the government to follow the lead taken by the Italian Government, who have ‘taken off’ some policy costs that it had applied to industrial consumers.

‘We’re asking very much the same because when Government says ‘We’re not going to do any bailouts’, that’s not what we’re asking for,’ he said.

‘What we’re asking for is, ‘hey Government, we’ve been telling you for a decade that your policies add something like £55million that we pay in the UK, as the steel sector, that our competitors in, say, Germany don’t pay. Historically that puts us at a competitive disadvantage.’   

Labour says the Government is in chaos because of a series of crises. The cost of gas in particular will see annual bills rise for all Britons in the coming year by up to £1,000 and energy-hungry factories say they may have to reduce hours or shut down completely. 

Economists warn ‘groupthink’ is stopping Bank of England lifting interest rates to control inflation that could hit 6 PER CENT – as Kraft Heinz says food prices WILL go up

Economists have warned that ‘groupthink’ is stopping the Bank of England raising interest rates to control inflation that could go as high as 6 per cent.

Andrew Sentance, a former Monetary Policy Committee member, said he was ‘a bit surprised’ there are not more voices at the Bank calling for rates to be eased up soon.

The key group has so far voted unanimously to keep the level at the record low of 0.1 per cent, despite predicting that inflation will top 4 per cent – double its target.

But Cabinet ministers are privately concerned that the stance is ‘complacent’ and early action could head off more serious problems.  

The comments came as Kraft Heinz warned that it can only hope to minimise the price rises being passed on to consumers, amid huge supply chain pressures  worldwide after the pandemic. 

Speaking on BBC Radio 4’s Today programme, Mr Sentance – who now works for Cambridge Econometrics – said very gradually easing up interest rates from their record low to 1-2 per cent would send a ‘signal’ the Bank is determined to tackl inflation.  

Meanwhile, Kraft Heinz chief Miguel Patricio said the firm is ‘raising prices, where necessary, around the world’ of products including ketchup and baked beans.

Mr Patricio said this was because of a lack of truck drivers in the UK and labour shortages and an increase in logistics costs in the US.

He told the BBC consumers will need to get used to paying more for food due to the world’s rising population and a lack of land to grow produce.

But he also said firms would have to take on the cost rises, adding: ‘I think it’s up to us and to the industry and to the other companies to try to minimise these price increases.’

Speaking about the reason behind the increases, Mr Patricio said: ‘Specifically in the UK, with the lack of truck drivers.’

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There are still shortages of petrol in London and the south-east almost three weeks into the crisis while there are gaps on shelves amid warnings that Christmas foods and gifts could be in short supply due to a lack of HGV drivers and problems with the global supply chain. 

Mr Kwarteng told Sky News yesterday he was ‘constantly’ in conversation with the Treasury to see what support can be given to manufacturers and energy firms.

But a Treasury source hit back, saying: ‘This is not the first time the [Business] Secretary has made things up in interviews. To be crystal clear, the Treasury are not involved in any talks.’

Firms have slammed ministers for failing to help protect companies from an energy price shock that could see factories shutting down within weeks.

Heavy-industry leaders, covering steel, brick manufacturing, chemicals, ceramics and papers, are furious at the inaction.

UK Steel director general Gareth Stace warned of possible ‘long-term damage’ to the industry. He said: ‘Currently, UK steel-makers face energy prices five times higher than the average of last year, in addition to remarkable price volatility.

‘As such, 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.’

Dr Laura Cohen, chief executive of the British Ceramic Confederation, said: ‘I am really concerned that the Secretary of State hasn’t understood the urgency of what we’re asking for.

‘We need practical gas emergency measures that keep enough gas available and our factories going when supplies get tight.’

Mr Kwarteng guaranteed he will keep the energy price cap for consumers in place throughout the winter but said he will not ‘bail out failing energy suppliers’.

Asked if he had approached the Treasury about subsidies for industry, said: ‘No, I haven’t. We’ve already got subsidies in place and it’s very clear that a lot of those are working.’

Meanwhile the Government has brokered a deal with the carbon dioxide (CO2) industry to ensure supplies continue to be available.

The rising price of gas forced a major CO2 producer, CF Fertilisers, to shut down its two UK plants last month, choking off supplies that are used across numerous industries including stunning animals for slaughter, extending the shelf life of food, aiding in surgical operations and cooling nuclear power plants.

Carbon dioxide is a by-product of fertiliser manufacture and the US firm supplies around 60% of the UK’s needs.

Ministers strike deal on CO2 supplies 

The Government has brokered a deal with the carbon dioxide (CO2) industry to ensure supplies continue to be available.

The rising price of gas forced a major CO2 producer, CF Fertilisers, to shut down its two UK plants last month, choking off supplies that are used across numerous industries including stunning animals for slaughter, extending the shelf life of food, aiding in surgical operations and cooling nuclear power plants.

Carbon dioxide is a by-product of fertiliser manufacture and the US firm supplies around 60% of the UK’s needs.

The Government stepped in for a three-week period to prop up the firm in a move that was expected to cost “possibly tens of millions” of pounds, according to Environment Secretary George Eustice.

But now the Business Secretary, Kwasi Kwarteng, said a “more sustainable solution” had been found.

The deal means that until January 2022, those who buy CO2 from CF Fertilisers will pay a set price, which will allow the company to continue operating while global gas prices remain high.

And the Department for Business, Energy and Industrial Strategy (BEIS) said this reflected “the vital importance of this material to everything from our nuclear industry to hospitals to the food and beverage industry”.

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The Government stepped in for a three-week period to prop up the firm in a move that was expected to cost ‘possibly tens of millions’ of pounds, according to Environment Secretary George Eustice.

But Mr Kwarteng said a ‘more sustainable solution’ has been found.

The deal means that until January 2022, those who buy CO2 from CF Fertilisers will pay a set price, which will allow the company to continue operating while global gas prices remain high.

And the Department for Business, Energy and Industrial Strategy (BEIS) said this reflected ‘the vital importance of this material to everything from our nuclear industry to hospitals to the food and beverage industry’.

Mr Johnson, wife Carrie and son Wilf are taking a sunshine break thousands of miles from the problems engulfing Britain at a £25,000-a-week luxury hideaway – which is owned by one of his ministers.

Spanish media reported that the Prime Minister and his young family are staying at Tory peer Zac Goldsmith’s home in the hills above the Costa del Sol. 

Plenty of security officials and police activity have been spotted around the property over the last day, after Boris’ trip was revealed by the Mail and other newspapers yesterday.

Mr Johnson’s foreign holiday – his first since before the pandemic – is likely to be seized on by critics, who will point out that he has left the country in the middle of a fuel crisis and with families facing a predicted ‘winter of discontent’, surging energy prices and stock shortages.

But it is hoped some time in the luxurious Spanish hillside hideaway will give him time to recharge.

And today, residents of the picturesque village of Benahavis said the Prime Minister’s visit had become the talk among locals. 

‘Yes for sure your prime minister Boris Johnson is staying up at the house,’ farmer Pedro Benares told MailOnline. ‘I don’t know when he arrived but everyone in the village is talking about it.

‘It is a very big house and very private but they have to drive in and out.’

Spanish media reported that the Prime Minister and his young family are staying at Tory peer Zac Goldsmith's home in the hills above the Costa del Sol.

Spanish media reported that the Prime Minister and his young family are staying at Tory peer Zac Goldsmith's home in the hills above the Costa del Sol.

 Spanish media reported that the Prime Minister and his young family are staying at Tory peer Zac Goldsmith’s home in the hills above the Costa del Sol.

Plenty of security officials and police activity have been spotted around the property over the last day, after Boris' trip was revealed yesterday

Plenty of security officials and police activity have been spotted around the property over the last day, after Boris' trip was revealed yesterday

Plenty of security officials and police activity have been spotted around the property over the last day, after Boris’ trip was revealed yesterday

Mr Johnson's holiday there is likely to be seized on by critics, who will point out that he has left the country in the middle of a fuel crisis and with families facing a predicted 'winter of discontent', surging energy prices and stock shortages. Pictured: Boris and Carrie last took a family break with Wilfred in Scotland last year

Mr Johnson's holiday there is likely to be seized on by critics, who will point out that he has left the country in the middle of a fuel crisis and with families facing a predicted 'winter of discontent', surging energy prices and stock shortages. Pictured: Boris and Carrie last took a family break with Wilfred in Scotland last year

Mr Johnson’s holiday there is likely to be seized on by critics, who will point out that he has left the country in the middle of a fuel crisis and with families facing a predicted ‘winter of discontent’, surging energy prices and stock shortages. Pictured: Boris and Carrie last took a family break with Wilfred in Scotland last year

But it is hoped some time in the luxurious hillside hideaway will give him time to recharge. The main house is set on three levels and sleeps 13. It includes a two-bedroom apartment with private access

But it is hoped some time in the luxurious hillside hideaway will give him time to recharge. The main house is set on three levels and sleeps 13. It includes a two-bedroom apartment with private access

But it is hoped some time in the luxurious hillside hideaway will give him time to recharge. The main house is set on three levels and sleeps 13. It includes a two-bedroom apartment with private access

A Civil Guard patrol car was spotted driving up to an entrance gate at lunchtime today and greeting undercover police parked near the property as they left

A Civil Guard patrol car was spotted driving up to an entrance gate at lunchtime today and greeting undercover police parked near the property as they left

A Civil Guard patrol car was spotted driving up to an entrance gate at lunchtime today and greeting undercover police parked near the property as they left

The estate, known as Torre Tramores, is a short drive from the picturesque village of Benahavis, and has its own helipad to make sure VIP holidaymakers can arrive and leave without being seen

The estate, known as Torre Tramores, is a short drive from the picturesque village of Benahavis, and has its own helipad to make sure VIP holidaymakers can arrive and leave without being seen

The estate, known as Torre Tramores, is a short drive from the picturesque village of Benahavis, and has its own helipad to make sure VIP holidaymakers can arrive and leave without being seen








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