Industry leaders warn factories could stop production due to energy costs

Industry leaders have warned the UK Government that factories across the country could stop production due to rising energy costs, while around 14 million households will face ‘significant rise’ in their energy bills.

Consumers are facing soaring bills due to the gas crisis

Andrew Large, director-general at the Confederation of Paper Industries, and Gareth Stace from UK Steel attended a meeting with the Business Secretary Kwasi Kwarteng and other representatives of energy intensive industries to discuss the wholesale gas crisis on Friday afternoon.

Speaking afterwards, Mr Large claimed it was “very clear” across all of the sectors that there are “serious” risks factories could stop all activities as a result of the gas prices being too high.

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Mr Stace claimed the Government has done “nothing” to alleviate the crisis unlike other governments in Europe.

Business secretary Kwasi Kwarteng

He said: “What we’re asking Kwasi Kwarteng today to do on wholesale prices, is just to step in, to alleviate that pressure in the short term, just like in say Portugal or Italy, their governments are already investing, many billions of euros, to help their industries and the UK Government has yet done nothing.”

On what the worst-case scenario could be, Mr Stace said steel plants could close for good.

He explained: “The nightmare scenario would be that we produce less steel in the UK, that we see all of that steel that we do consume in the UK, and that’s increasing, be met by imports and once you take away a steel plant, you don’t really bring them back.

“That’s it for good. Once it’s done, it’s done.”

The meeting comes as analysts have predicted Britons could see their energy bills rise by 30 per cent next year.

Bills are expected to rocket this winter for consumers whose fixed-term contracts are coming to an end.

And in April next year, the price cap, which applies to around 14 million households across the UK, will rise again.

The chief executive of energy regulator Ofgem Jonathan Brearley said yesterday he expected “a significant rise in April”.

However, he said the regulator will not change the cap from its current levels until then.

He added: “This is a really concerning time for customers … We understand how difficult it is.

“The price cap is there to protect customers against unfair profits, but legitimate costs do have to be passed through.”

Meanwhile, Boris Johnson has appointed former Tesco chief executive Sir Dave Lewis as a supply chain adviser to fix both the immediate crisis facing a number of British industries and prevent future chaos.

Sir Dave, who stepped down from the supermarket giant in September last year after turning around its fortunes following its major accounting scandal, will work with the Prime Minister and the Chancellor of the Duchy of Lancaster Stephen Barclay, as it was revealed around one in six adults in Britain have been unable to buy essential food items in the last fortnight.

Some 17 per cent of adults said they had not been able to purchase such goods because they were not available, according to the Office for National Statistics (ONS).

Almost a quarter (23 per cent) said the same for non-essential food items.