A minister has sought to play down splits between government departments over support for firms struggling with fast-rising energy prices, denying that the business secretary had lied and blaming a spat between the Treasury and business department on “unnamed sources”.
In extraordinary events on Sunday, after the business secretary, Kwasi Kwarteng, said he was consulting the chancellor, Rishi Sunak, about what help could be offered, Treasury sources openly rejected this and accused Kwarteng of “making things up”.
Asked if this meant Kwarteng had lied, the Home Office minister Damian Hinds said: “Of course not.”
Hinds, who also defended Boris Johnson’s decision to go on holiday to Spain for the week, told Sky News: “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.”
Many businesses, particularly those with high energy needs, have expressed alarm at the pace of increase in energy prices, warning they could affect production. Some have said the businesses department did not seem aware of the extent of the crisis.
One industry boss who attended the meeting with Kwarteng on Friday said the business secretary suggested soaring prices were temporary and driven by the weather.
However, after pressure from businesses, which said they were likely to be forced to suspend production if costs remained high, he had promised to examine their suggestions and ask the Treasury to consider some of their demands, including a cut to green levies and a request that the energy regulator, Ofgem, replicates the network tariff discounts offered to competitor industries in the EU.
Gareth Stace, the director general of UK Steel, which represents the sector, said companies wanted parity with trading conditions experienced by EU competitors. “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,” Stace said.
“What we’re asking for is, ‘Hey, government, we’ve been telling you for a decade that your policies add something like £55m 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.”
He called on Johnson to “bang ministerial heads together, take control and remember that if he does nothing, then his levelling-up ambition will be left in tatters”.
The prime minister is on holiday this week, reportedly staying at a luxury villa in the south of Spain owned by Zac Goldsmith, the Conservative former MP who Johnson made a peer and kept on as a government minister after he lost his Commons seat.
Hinds defended the timing of the holiday, telling Sky: “When is the right time? I think it is important that people do have an opportunity to be with their families to have some relaxing, unwinding,
“But I wouldn’t want to overstate the amount of unwinding and relaxing you get to do as prime minister because, as I say, you are constantly in touch, you are constantly being briefed and you remain in charge of the government.
“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.”