The spat between senior ministers over energy is continuing to make waves, as the business department have been left reeling from a “brutal” Treasury briefing.
A source at the Department for Business, Energy and Industrial Strategy (BEIS) told Sky News the comment from a Treasury source – minutes after Kwasi Kwarteng had finished TV interviews talking about support for heavy industry – was “dreadful”.
The source added: “I get that they’ve got a difficult role with lots of spending demands but there was no need for a brutal slapdown.”
Tensions over support for industry boiled over yesterday as the business secretary suggested the Treasury were in discussions about it, only for a source to dramatically hit back saying “to be crystal clear the Treasury are not involved in any talks” and accusing Mr Kwarteng of “making things up”.
As engagement with businesses continues today, the government are trying to dampen down the row, with Home Office minister Damian Hinds telling Sky’s Kay Burley no-one was “telling porkies”.
But as to what support energy-intensive industries such as steel, ceramics and chemicals might get, he would only say they already had support for eight years “as we move to net zero carbon future” and benefitted from “unprecedented” support during the pandemic.
Mr Hinds said the message of the prime minister’s party conference speech last week was that “private sector investment is the engine of our economy”.
But while there was good news from the owners of Liberty Steel for its plants in Rotherham and Stocksbridge overnight, thanks to a cash injection, UK Steel say pauses in production elsewhere could do long-term damage.
Treasury sources say they have not received any proposals or representations on support for heavy industry and are “ready to go through them if and when we do”.
Labour’s view is that the Treasury should be holding those discussions already. Shadow Treasury spokesperson Pat McFadden told Sky News a £50million proposal from UK Steel for a price cap for businesses was “not a huge amount in government terms…but it could make a key difference in saving thousands of jobs and keeping an industry like that going”, he said.
The difficult politics of this is that a number of Tory MPs in industrial areas are also concerned, saying communities they represent depend on it.