As industry leaders call for action from ministers, the government is being put under greater pressure to help parts of the economy that are struggling due to rising fuel prices.
Kwasi Kwarteng, Business Secretary, met with leaders of heavy industry Friday. However they were unable to reach any solution.
Labour accused the government, claiming that it is in denial of the crisis.
Since January, gas prices have gone up 250%. This has a dramatic effect on costs.
Un government source confirmed that an industry price cap was being looked into.
Andrew Bridgen (Conservative MP for North West Leicestershire) said that he supports government intervention in order to support energy-intensive sectors in the short term.
He said, “But, we require… a long-term sustainable energy policy that is dependent on multiple sources of supply.”
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Miriam Cates (Conservative MP) said the soaring cost of energy had become “acute”.
She called on the government to act and to consider every option to safeguard the steel industry which, she stated, was under “serious threat”.
She said, “In long-term it’s vital that the government considers steel an industry… critical to our future – we can’t achieve infrastructure commitments and net-zero without Steel.”
Jo Gideon (Conservative MP for Stoke-on-Trent Central) stated that “potters brickmakers and materials scientists” need government support in order to reduce carbon emissions while remaining competitive.
The comments were made by a trade group warning ceramics companies that they may have to reduce or cease production because of the rising gas prices.
Gareth Stace, UK Steel’s boss, stated that the government has failed to stop the escalating energy prices after meeting with Mr Kwarteng.
“We cannot wait to Christmas and beyond. Even a few more weeks. He stated that we need immediate action and it must be decisive, quick action.”
According to him, Mr Kwarteng had been attentive but had not provided any immediate solutions nor guarantees.
UK Steel Director General said that he was confused by how governments around Europe supported industry, even though they had lower energy costs than the UK.
Talks with business secretary were attended by representatives of energy-intensive sector such as glass, paper, steel, cement, lime and ceramics.
Richard Leese, chair of the Energy Intensive Users Group(EIUG), stated that the government made positive first steps towards developing practical solutions after the meeting.
Since the beginning of this year, wholesale gas prices have risen dramatically. The UK also has lower gas reserves than European countries which may help to cushion volatility in the price of wholesale gas.
The price cap that regulates Ofgem limits the rate at which bills may rise for domestic customers is a part of what protects them from sharp increases in their bills.
However, UK householders have experienced the effects of the October price increase.
Ofgem warns customers that there will be more “significant increases” for spring.
It is reviewed twice each year. Next, it will be modified in April.
This applies to all households located in England, Scotland, and Wales during this month.
Northern Ireland’s households also experienced a sharp increase in their bills recently, although they aren’t protected under the energy price cap in Great Britain.