Minister says he's working with chancellor on energy crisis support but Treasury source denies claim

The energy crisis is also affecting businesses like care homes where energy usage is high, because it's crucial to looking after residents, ITV News Political Reporter Shehab Khan reports

Hopes that firms could receive a major package of support to weather the energy crisis this winter faded as the Treasury denied there have been talks with the business department.

Business Secretary Kwasi Kwarteng said on Sunday that he is working closely with Chancellor Rishi Sunak to help industry as wholesale gas prices spiral.

But a Treasury source told ITV News Political Reporter Shehab Khan that no such talks have taken place.

It seems as though the two government departments - Department of Business and the Treasury - are at war over who is responsible for supporting the energy industry, Shehab Khan explains

Mr Kwarteng said he is certain that the lights will stay on in the UK this winter as firms warned they may have to reduce working hours to sustain themselves during the crisis.

Despite the fears from the energy sector, the minister said household bills will not rise this winter as the price cap will remain in place.

Soaring wholesale gas prices have contributed to nine energy firms collapsing this year, with the price cap meaning they can only charge consumers so much and so may be operating at a loss.

Despite firms pleading for help to prevent further collapses, the Spelthorne MP said he will not “bail out failing energy suppliers”, though he did not rule out a cap for firms.

Asked if he has approached the Treasury about subsidies, he told Sky News' Trevor Phillips on Sunday: “No, I haven’t. We’ve already got subsidies in place and it’s very clear that a lot of those are working.

“On the consumer side, we’ve got an energy price cap, and on the industry side we have measures where we support industries, heavy electricity users.

“What I’m very clear about is we need to help them get through this situation – it’s a difficult situation, gas prices, electricity prices are at very high levels right across the world and of course I’m speaking to government colleagues, particularly in the Treasury to try and see a way through this.

“I can’t come on your programme and say we’re going to have a price cap because we’re trying to work out what the nature of that support might be.”

Kwasi Kwarteng Credit: Jeff Overs/BBC/PA

Mr Kwarteng acknowledged it is a “critical situation” but denied he has asked for billions of pounds worth of support when questioned whether he is considering a price cap for businesses or a winter package.

He told the BBC’s The Andrew Marr Show: “I’ve not asked for billions, we’ve got existing schemes. I’m working very closely with Rishi Sunak, the Chancellor, to get us through this situation.”

But it was heavily disputed whether the chancellor or his department have been involved in any talks.

When Shehab Khan asked the source at the Treasury whether Mr Kwarteng had made the claim up, they replied "yes".

Labour called for “urgent answers on who exactly is running the show” after Mr Kwarteng’s claims he was in talks with the Treasury over support for firms struggling during the energy crisis were denied by the Treasury.

Shadow chief secretary Bridget Phillipson said: “In the teeth of a crisis of its own making, the Government has put its out of office on.

The prime minister has gone on holiday, no one knows where the chancellor is, and this morning we understand the business secretary has entered the realms of fantasy.”

Some Tory MPs are among those calling for additional help for energy-intensive industries, such as steel manufacture, during the crisis.

Mr Kwarteng faced demands for a “winter package of measures” to prevent further interruptions to supply chains during a meeting with industry representatives on Friday.

Asked if he was going to give extra help to energy intensive industries, like steel, Mr Kwarteng said: “We’re looking to find a solution.”

Told by Andrew Marr that it sounds like a yes, Mr Kwarteng replied: “No, that doesn’t sound like yes at all. We already have existing support and we’re looking to see if that’s sufficient to get us through this situation.”

Pressed if he is absolutely sure the lights will stay on this winter, the business secretary replied: “Yes, I am.”

Earlier, Mr Kwarteng had written in the Sunday Express that keeping the price cap unchanged ahead of its next scheduled change in April is “non-negotiable for me”.

He argued the cap will hold back instant bill hikes for millions of customers, but some company bosses have argued the move will ultimately be costly for taxpayers.

There are fears in the energy sector businesses could collapse as they are priced out by soaring wholesale costs and a fixed costs cap. Credit: PA

Proposing reforms including increasing the review of the cap from twice to four times a year, Utilita Energy’s non-executive chair Derek Lickorish said: “The cap is not fit for purpose.”

“There is no doubt that there is going to be a huge cost paid by customers for failed suppliers… certainly well over £100 million for every 200,000 customers that fail,” he added BBC Radio 4’s Today programme.

“The government has to look at means by which they can support not only energy suppliers but also big industry.”

UK Steel director general Gareth Stace warned the government that a failure to act “may result in long-term damage to the future of the steel industry”.

“Heading into the winter months, increasing prices could result in extended shutdowns, damage to equipment, loss of export opportunities and market share at home, and a loss of talent and employment,” he added.

Troubled firm Liberty Steel announced on Sunday it would be reopening two plants, Shehab Khan explains

Amid the energy crisis, troubled firm Liberty Steel announced on Sunday it would be reopening two plants in Rotherham and Stocksbridge this month and the majority of 1,000 jobs will be secured.

The news comes after the company received a £50 million injection from its parent company.

Libert Steel got into trouble when its main lender Greensill Capital, which David Cameron worked for, collapsed.