Brexit has triggered 'explosion' of investment says Rishi Sunak
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After a tense meeting with industry leaders on Friday, Energy and Business Secretary Kwasi Kwarteng is expected to ask the chancellor for billions of pounds to tackle rising energy costs in factories. Industry leaders have warned the Chancellor has “days” to act as some factories are on the brink of having to halt production.
Managers from the steel, glass, paper, cement, lime, ceramics and chemical industries pleaded with Mr Kwarteng for subsidies and a cap on gas prices, but while the Business secretary was reportedly sympathetic, he said he would need to convince the treasury.
A senior Whitehall source close to the discussions told The Times: “If we had the money, we would give it to them today.
“But it’s not in our gift. It’s down to the Treasury.”
Mr Kwarteng is understood to have ruled out a price cap as he believes the scheme would be too difficult to implement.
It is believed the Business Secretary will present a number of emergency proposals to Rishi Sunak and other Governmental departments this week.
“We have got to make a strong case to the Treasury to help these industries make it through the winter months,” the source added.
“We as a department are their biggest champions in this and are trying to work with them to find a solution across government.”
Some factories have already begun switching off production as record energy prices have made operating the facilities economically unviable.
One industry chief told The Sunday Times its members would halt production in mere weeks without Government support and said a solution was needed “within days” or there would be chaos.
He further warned the subsidies needed could extend into billions of pounds.
A source close to the Treasury said a “blank cheque” could not be written for the industry but added that they were conscious of the need to stop companies in critical industries going under.
Gas prices in the UK and the EU have shot up this year amid increasing demand and dwindling supply.
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Wholesale gas prices have risen by more than 250 percent since January and over 70 percent since August.
With no energy price cap for businesses, unlike those for households, there is nothing to protect them from rising costs.
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