Industry chiefs told how “very alarmed” they were that at such a “critical time”, the Treasury and Department for Business, Energy & Industrial Strategy [BEIS] were at loggerheads over what was being done to stop firms going bust.
The Prime Minister, who is on holiday near Marbella, was called on to step in to get Whitehall working fully together to address the threats faced by companies, with warnings that some could be forced to stop production within days due to the sky-high cost of energy.
Gareth Stace, director general of UK Steel, told LBC Radio: “With the reported government infighting between the Treasury and BEIS, the Prime Minister now needs to bang ministerial heads together, take control and remember that if he does nothing, then his levelling-up ambition will be left in tatters.
“I’m sure he can get on the phone and get talking to them but to my mind, now is not the time for a Prime Minister to be on holiday, from the steel sector point of view.”
Mr Johnson is reported to have flown to Marbella to stay with his family in a luxury private villa on the Costa del Sol, owned by Tory peer and minister Lord Goldsmith, according to Spanish media. Security minister Damian Hinds defended Mr Johnson’s decision to go on holiday while the country is in the middle of an energy crisis.
The wholesale cost of gas has rocketed, some energy firms have gone bust meaning higher bills for many of their customers, London is still blighted by petrol shortages, a lack of HGV drivers has left some supermarket shelves empty and the £20-a-week uplift in Universal Credit has been cut.
Mr Hinds told Sky News: “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.”
In a sign of this, Mr Johnson held talks this morning with Indian prime minister Narendra Modi.
Shadow Treasury minister Pat McFadden said he “doesn’t care” whether or not Mr Johnson is currently on holiday but stressed: “What I want is grip from the Government.
“Whether he’s in Spain, whether he is in the UK, it seems just as chaotic.”
Sectors such as steel, ceramics and paper manufacturing have called for an energy price cap, similar to the one for households.
Dave Dalton, chief executive of British Glass, stressed that the conversations on the crisis between the Government and industry were at an early stage, after talks on Friday.
He told BBC Radio 4’s Today show that after the specific problems faced by individual companies were explained, “it seemed to prick the ears of the Secretary of State to asking his civil servants to work with us quickly and closely to try and build an ask to go to Treasury”.
He added: “We did not get to specifics, the meeting was very much an introductory one and had hoped over the weekend and today that dialogue would be extended — very alarming to hear the Treasury making denials over the approach..we need immediate action.”
The business chiefs’ appeals came after a Whitehall bust-up which saw a Treasury source flatly denying a suggestion from Mr Kwarteng that he was in talks with the Treasury about how to support firms struggling because of the spike in energy costs.
The tone of the slap down was particularly striking, with the source claiming: “This is not the first time the (Business) Secretary has made things up in interviews. To be crystal clear, the Treasury are not involved in any talks.”
During a media round this morning, Mr Hinds was forced to deny on LBC Radio that Mr Kwarteng had been “making things up”.
He added: “Government ministers are in contact with each other the whole time. That’s how government works… Clearly this is a serious situation… and of course, the Business Secretary is going to be totally focused on the impact of that on industry Equally, the Treasury is going to be very focused on the impacts on the economy.”
He added: “We’re all also very focused on the impacts on consumers and that’s why things like the energy price cap are so important and the warm homes discount.”
However, Adam Scorer, chief executive of National Energy Action, told LBC more would also need to be done to protect consumers amid warnings that energy bills could jump by £400 to £500 in the spring.
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