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Wednesday, October 27, 2021

Thousands Of Jobs Leave Factories Over Energy Costs As BoJo Suns In Spain – Climate Change Dispatch


Boris Johnson is facing growing unrest from Tory MPs amid fears thousands of jobs could go at factories hammered by soaring energy costs – while he holidays in Spain.

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 at a £25,000-a-week private estate near Marbella.

Within hours of Mr. Johnson departing, chaos broke out in Whitehall over whether there would be a rapid bailout to help struggling firms survive the energy crisis.


Business Secretary Kwasi 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, which is run by Chancellor Rishi Sunak, accused him of ‘making things up’ by claiming its departments were in talks about helping the industry.

Tory MP Andrew Percy – who has 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 Conservative Steel Caucus, which includes around a dozen Tory MPs with industrial seats, has been making increasingly desperate representations behind the scenes.

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 leveling-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’.

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 added that he wants the British Government to follow the lead taken by the Italian Government, which has ‘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 £55 million 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.

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.

Kwasi Kwarteng told Sky News 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 is 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 ‘bailout 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.’

Labour Treasury spokesman Bridget Phillipson called on the Government to ‘get a grip’.

‘The two key government departments responsible for the current cost of living crisis have spent this morning infighting about whether they were in talks with each other. What a farce,’ she said. ‘If government ministers can’t even tell the truth about each other, then what hope do we have for the challenges facing our country? We need urgent answers on who exactly is running the show.’

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.

h / t Rúnar O.

Read rest at Daily Mail

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