Job crisis looms if industry not supported over soaring energy price, ministers warned

ITV News Deputy Political Editor Anushka Asthana reports on those hit hardest by high energy costs

There could be a "job crisis" in the UK affecting various industries if the government does not step in to help businesses struggling with soaring energy costs, ministers have been warned.

While household energy customers are protected by a cap on bills, businesses are not, meaning many are being crippled by the rising wholesale gas price, which has rocketed by more than 250% this year.

Business Secretary Kwasi Kwarteng held talks with industry leaders last week, and discussions will be ongoing throughout the week, looking at what the government can do to help.

But the government is facing demands for “immediate action” to protect firms from rising costs.

Minister Damian Hinds did not reveal what kind of support could be provided when asked by ITV News whether the government was considering providing grants to help businesses or an energy price cap to protect them.

He said: "I totally acknowledge that for business as a whole, when you a have a rising cost like this, that is an issue and particularly for energy intensive industries, the more so.

"I know that the business secretary is in talks - we'll have conversations today with people in industries about some of these affects."

Which industries are facing a 'job crisis'?

The wholesale cost of gas has risen globally, meaning firms all around the world are being impacted, however those which rely much more heavily on energy are the hardest hit.

Shadow business secretary, Labour MP Pat McFadden, said "it has become clear we've got a real potential job crisis here, affecting steel, ceramics, glass making and so on" - there are also concerns about the paper production industry.

Gareth Stace, director general of UK Steel, has called on the prime minister to “bang ministerial heads together” to avoid an industry crisis hitting his sector.

The Energy Intensive Users Group (EIUG), which represents a number of energy-reliant industries, said it was keen to "work with government to avoid threats both to the production of essential domestic and industrial products, as well an enormous range of supply chains critical to our economy".

The EIUG's membership comprises trade associations which include UK Steel, the Chemical Industries Association, the Confederation of Paper Industries, the Mineral Products Association, the British Glass Manufacturers Federation, the British Ceramic Confederation, BOC, Air Products and the Major Energy Users Council.

It is pressing the government to implement "prompt and preventative measures to help avoid recent production curtailments in the fertiliser and steel sectors being replicated in other areas this winter".

Dave Dalton, chief executive at British Glass, told ITV News of the huge financial implications if a glass producer is forced to stop production.

"We can't switch a furnace off," he said, "it's a 24/7, 365 process with tens of millions of pounds invested in that principle furnace".

"The option of switching it off is to ruin the furnace and risk a 20, 30 million pound rebuild."

The business secretary indicated on Sunday that struggling manufacturers and energy firms will not get much more support but said he was working closely with Chancellor Rishi Sunak to help the industry.

Treasury denies working with business secretary

Mr Kwarteng had told the BBC on Sunday morning that he was "working very closely with Rishi Sunak, the Chancellor, to get us through this situation", but a Treasury source flatly denied any cooperation between the pair.

The source told ITV News that the Treasury is "not involved in any talks", adding that Mr Kwarteng was making it up.

A Treasury source told Sky News: "This is not the first time the BEIS secretary has made things up in interviews."

ITV News Political Editor Robert Peston assesses just how damaging the issue is to Boris Johnson

On Monday morning security minister Mr Hinds sought to downplay any issues between the two departments.

He said: “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 focused on.

“Something that the Treasury, of course, is also very focused on as the economic management department of the nation.”

Labour, meanwhile, said the chancellor was "missing in action" during the "growing crisis".

Labour shadow chancellor Rachel Reeves wrote to Mr Sunak, demanding that the government does not allow steel, ceramics, glass, paper and chemicals businesses to go under because of temporarily high energy prices.

She said: “The government should be protecting and supporting them through a crisis which has come about from their own lack of planning."

“It’s crucial to also see the government out reassuring the public that they won’t be hit with more rising costs as millions are left with less money in their pockets. Not doing so is looking increasingly out of touch,” she added.

Mr Dalton said a meeting on Friday had started the process of asking for support, as he labelled the situation between the Treasury and Business Department as "farcical".

He said: “It seemed to prick the ears of the Secretary of State to asking a civil servant to work with us quickly and closely to build an ask to go to Treasury.

“We didn’t get to specifics, the meeting was very much an introductory one, and we had rather hoped over the weekend and today that that dialogue would be extended.

“It’s very alarming to hear the Treasury are making denials over the approach, let alone anything else. We need immediate action.”