Gas price crisis: PM 'to spend hundreds of millions saving thousands of jobs' in bailout

12 October 2021, 05:55 | Updated: 12 October 2021, 06:14

Boris Johnson is set to back a bailout of firms worth hundreds of millions of pounds
Boris Johnson is set to back a bailout of firms worth hundreds of millions of pounds. Picture: Alamy

By Will Taylor

Boris Johnson is set to step in and stop thousands of jobs being lost in a multimillion-pound bailout of industries affected by soaring gas prices.

Firms in industries that require large amounts of energy would be supported with Government loans.

It would mark a win for Kwasi Kwarteng, the business secretary, amid a bizarre war of words between his department and Rishi Sunak's Treasury.

The latter department accused Mr Kwarteng of inventing claims that he was talking to the Chancellor's staff about intervening to support firms.

Read more: Energy crisis: Factory production could come to halt as gas prices soar

Read more: Major UK CO2 supplier subsidised by taxpayer hikes gas prices

The Times said Mr Kwarteng was pushing to back chemical, steel and other businesses that use high amounts of energy and prevent thousands of people losing their jobs.

The Government's bailout is set to cost hundreds of millions of pounds, multiple reports say. The BBC said the Treasury was still analysing plans.

The Times reports a senior Whitehall figure as saying: "This is a problem that industry is facing now.

"There is not a huge amount of time to get this sorted before factories start shutting down and thousands of people face losing their jobs."

The blame for rising gas prices has been placed on a cold winter, which depleted stocks, high demand for liquefied natural gas in Asia, and reduced supplies from Russia.

A range of smaller energy companies have collapsed in recent weeks as they struggled to deal with soaring costs.

And the crisis is not limited to businesses, with households facing bigger bills while their providers go bust.

Previously, the head of energy regulator Ofgem, Jonathan Brearley, told MPs that "well above" hundreds of thousands of customers could end up being affected.

But he did point out that historic price spikes have "gone away".

Mr Kwarteng has insisted the energy price cap will stay in place.

He told LBC's Swarbrick on Sunday: "The best way we can protect consumers as far as bills are concerned is with the energy price cap.

"That's not going anywhere."

The Government has already intervened to help the UK's main CO2 supplier, reportedly ploughing tens of millions of pounds into the US-owned fertiliser company CF Industries.

The deal allowed a plant in Teeside to restart production - and on Monday it was announced the company was hiking prices.

Last month, Labour's shadow business secretary Ed Miliband, said: "A basic duty of government is to ensure secure, affordable energy supplies for businesses and families.

"It is a fundamental failure of long-term government planning over the last decade that we are so exposed and vulnerable as a country and it is businesses and consumers that are paying the price.

"If we had been investing at sufficient scale in diverse, secure, zero carbon energy supplies and making energy efficiency a much bigger priority, we would not be in such a precarious position."