The steel industry has said government proposals to lend money to heavy industry to help energy-intensive businesses survive the impact of soaring gas prices would be little more than a “sticking plaster”.
Uncertainty about how to support those industries, which have warned of factory shutdowns and higher prices for consumers, has already sparked a row between the Treasury and the business secretary, Kwasi Kwarteng, over whether to offer financial support.
While the Treasury is understood to be reluctant to fund a bailout, ministers are weighing up proposals from Kwarteng to provide short-term loans or guarantees while gas prices are high, to help sectors such as steel, glass, chemicals and paper.
The trade body UK Steel said it backed Kwarteng in calling for assistance from the chancellor, Rishi Sunak, but warned that short-term lending alone would leave the industry battling against a “hostile environment” and at risk of shutdowns.
“While the business secretary’s swift intervention is to be commended, we must see the details of such a proposal, to assess whether these measures will be sufficient to deal with the immediate problems we face,” its director, Gareth Stace, said.