Boris Johnson 'to back multi-million pound loan bailout' to help businesses amid energy crisis

The prime minister has reportedly backed plans to step in and help struggling businesses. Credit: PA

Boris Johnson is preparing to sign off on plans for a multi-million pound bailout to help industries hit by soaring gas prices, according to reports.

Business Secretary Kwasi Kwarteng asked the Treasury to support energy-led industries amid fears of factories closing, thousands losing their jobs and more businesses going bust.

The minister issued the request on Monday in a bid to help prop up at risk businesses and retain thousands of jobs over winter when prices are expected to remain high.

It is understood the loans, which are set to be worth millions, are being backed by the prime minister despite reluctance from Chancellor Rishi Sunak, reported The Times.

The loans are set to be given to companies threatened with closure in sectors including steel, paper, chemicals and ceramics.

Mr Johnson is said to want to see the loan scheme put in place quickly - despite concerns from the chancellor.

It comes after energy bosses told ITV News more companies will go bust in as little as two weeks without immediate government intervention as prices rocketed by more than 250% this year.

Industries such as steel are some of the hardest hit by the rising prices Credit: John Giles/PA

One government source added: “Without urgent support to help British industry manage high global gas prices factories will close, many for good, and thousands of jobs will be lost.”

The Treasury previously denied to ITV News that it had been in talks with the Business Department, leading to fears a package of support would not be forthcoming.

There have been concerns in the Treasury as to how much support businesses might bid for if they believe government bailouts are on the table.

Mr Kwarteng held talks with industry leaders last week and ministers and officials are set to continue speaking to businesses throughout this week.

He has pledged to keep the energy price cap in place to help households struggling with rising costs.

But no new support for businesses had been promised, despite bosses and some Tory MPs calling for help to prevent them going under as wholesale prices soar.

A top government minister did not deny plans to bailout energy intensive companies when asked by ITV News.

On reports that the PM would support a bailout, Stephen Barclay, the Chancellor if the Duchy of Lancaster said "intensive" discussions with industries are ongoing to assess what level of support would be appropriate.

He added: "We've got to get the balance right between the support we offer and the taxpayer interest, given the significant support business has received over the last 18 months."

It comes as Tory frontbencher Lord Agnew of Oulton said soaring energy costs were nothing to do with supply shortages, but were due to a “geopolitical move” by Russia to put pressure on Europe.

The Treasury minister’s comments appeared to go further than the Government has gone before in pointing the finger directly at Moscow for the current crisis.

And it follows claims Russia had been limiting gas supplies in a bid to prod regulators in Europe into moving quickly to certify the controversial new Nord Stream 2 pipeline.