Business leaders warn of energy price chaos’ impact on supply chains
Industry leaders have warned the government that factories across the country could stop production due to rising energy costs.
The director-general of the Confederation of Paper Industries Andrew Large Gareth Stace of UK Steel, and other leaders of energy-intensive industries met with business secretary, Kwasi Kwarteng on Friday to discuss rising gas prices.
Speaking to BBC Radio 4’s PM programme after the meeting on Friday, Large warned of the potential risks for supply chains, saying: “When we talked with the secretary of state this afternoon, it was very, very clear across all of the sectors that there are serious risks of effectively factory stoppages as a result of the costs of gas being too high to bear, and in those circumstances there will be a gradual knock-on effect through supply chains, right the way across manufacturing, consumer retail and other products.”
Large explained how such shutdowns would be damaging to profits in the paper industry.be damaging for profitability, explaining: “Every minute that the machinery isn’t working, every minute that paper isn’t being produced is a damage to the profitability of the sector and a damage to the future investment potential and opportunities.”
Speaking to Channel 4 News yesterday Stace complained that the government had not acted to alleviate the crisis ahead of time, unlike other European governments.
He said there was a risk that steel plants could close for good if the crisis reached a “nightmare scenario”.
In a statement, the Department for Business, Energy and Industrial Strategy said about the meeting: “The business secretary stressed that the government remained confident in the security of gas supply this winter. He also highlighted the £2bn package of support that has been made available to industry since 2013 to help reduce electricity costs.”
Shadow business secretary and former Labour leader Ed Miliband hit back at the government, saying that: “This is a crisis made in Downing Street.
“Kwasi Kwarteng is scrambling to meet industry bosses but he is all talk. This chaotic Tory government got us into this mess in the first place and has no plan to address it.”
Energy bills could soar by one third for millions of households next spring as natural gas prices continue to rise.
Experts forecast that the energy price cap will be permitted to rise by an additional £400 when it is next reviewed in February.
The National Grid’s electricity system operator (ESO) warned that the UK must prepare for constrained supplies over the winter rising demand and supply gaps continue to wreak havoc across the energy market
