London Daily

Focus on the big picture.
Friday, Oct 23, 2026

Gas price rises: Kwarteng asks Treasury to help firms over cost

Gas price rises: Kwarteng asks Treasury to help firms over cost

The business secretary has asked the Treasury to support industries hit by soaring energy costs, a source has told the BBC.

Kwasi Kwarteng's formal request follows talks between ministers and industry leaders.

The details have not been disclosed, but they are thought to focus on a temporary solution to high prices.

Sectors such as steel manufacturing have called for a price cap amid fears for the survival of some factories.

There are a number of reasons for a steep rise in gas prices over the past year - including the reopening of industry after Covid lockdowns.

A source told the BBC that "everyone in government understands the importance of this situation".

"We need to solve this quickly," they added.

Mr Kwarteng's proposal follows confusion over the weekend, when his claim to be in talks with the chancellor about potential support was disputed by a Treasury source.

On Monday, the prime minister's spokesman said Treasury officials were involved in talks with the Department for Business, Energy and Industrial Strategy (BEIS).

"As you would expect, ministers from BEIS are working across government, including with the Treasury, on this important issue, the challenges currently facing industry in light of global gas prices, and that will continue," he said.


Darren Jones, Labour MP and chairman of the Commons BEIS committee, welcomed Mr Kwarteng's request for help and stressed the importance of finding short-term solutions.

He said a one-off windfall tax on gas producers was worth considering, because they had "made significant profits" during recent price fluctuations.

But he also said the UK should be focusing more and renewable energy sources and nuclear.

"Any subsidy from government should be on proviso that we bring forward, both from private and public sector, investment to move away from gas powered sources of energy to avoid these problems in the future," he added.

Dr Richard Leese, chairman of the Energy Intensive Users' Group which represents manufacturers, welcomed Mr Kwarteng's "urgency" and said he hoped for an "equally swift response" from the Treasury.


There have been bleak warnings about the potential impact of the spiralling energy price.

One government source warned of factories closing forever, and thousands of job losses as a result.

But despite that, ministers have struggled to maintain a united front over the past day.

When the business secretary told the BBC he was in talks with the chancellor, a Treasury source said he was wrong.

With the prime minister on holiday, it was left to his team to insist today that ministers were working across government to find solutions.

Tonight we have some clarity - the business secretary has made formal proposals. A source said an urgent solution was needed.

It's now up to the Treasury to decide whether to accept them.

BBC political correspondent Adam Fleming said earlier that business minister Lee Rowley, rather than Mr Kwarteng, was due to lead Monday's meeting - and would lead another with steel bosses on Tuesday.

Ministers also met industry leaders on Friday.

Dave Dalton, chief executive of the British Glass trade body called for "immediate action" following that meeting.

He said some members of his group might have to shut production permanently, although no firm had been forced to do so yet.

Adrian Curry, managing director of UK-based Encirc, one of the largest container glass plants in Europe, said industry was not asking for a bailout, but the situation for some companies was critical.

"We pay more for our energy than competitors in other countries," he told the BBC. He said his company would normally spend £40m a year on energy, but was now looking at bills up to £100m.

Why are gas prices so high?


There are many reasons, both in the UK and around the world.

There's been a shortage of gas and energy in many countries as they emerged from lockdown and industry reopened.

A cold winter in Europe last year also put pressure on supplies and, as a result, less gas is being stored than normal.

On top of that, the UK has fewer gas storage facilities than some countries - meaning it buys more on the wholesale market and is exposed to sharp price rises.

There's also increased demand from Asia (which also suffered a cold winter) for liquefied natural gas. And there is a suspicion that Russia, a major gas supplier, is restricting output - an accusation it denies - which, following the law of supply and demand, has fuelled price rises.

This has helped push up gas prices in the UK, Europe and Asia. Since January, they've risen 250%. And prices have soared 70% since August alone.

Trade group UK Steel told the BBC that Boris Johnson needed to take control before it was too late - although it described as "really good news" an announcement that the country's third largest steel maker, Liberty Steel, would restart operations at its plant in Rotherham this month.

The Unite union also called on the prime minister to "get a grip" to avert job losses if companies had to shut production because they could not cope with the increased cost of energy.

Downing Street has said Boris Johnson is continuing "to address the current issues around fuel and supply chains" while on holiday, after Labour accused the government of having "put its out of office on" over the weekend.

However, Conservative MP Mark Harper said the government should resist demands for financial support.


Domestic energy consumers have a certain amount of protection from rising prices due to a price cap, which sets the maximum price suppliers in England, Wales and Scotland can charge customers on a standard - or default - tariff.

However, the cap was increased on 1 October, meaning about 15 million households face a 12% rise in energy bills.

Industry has no such cap, meaning they are open to the risk of an unlimited rise in prices.

Already manufacturers and services are warning they will have to pass on their rising costs to consumers. And as energy costs are a big driver of inflation, few consumers and households will escape the consequences of the current crisis.

Newsletter

Related Articles

0:00
0:00
Close
Government Injects One Hundred and Forty Million Pounds to Expand Urgent Care Ahead of Winter Crisis
Department of Health Warns Further Pay Rises Will Derail National Health Service Waiting List Targets
Major Environmental Emergency Declared in South Wales Following Aerospace Kerosene Spill
Tank Barrel Production Returns to Britain as Defence Contractors Accelerate Domestic Rearmament
Government Approves Controversial Jackdaw Gasfield Development in the North Sea
National Health Service Maternity Safety Review Condemned Over Flawed Artificial Intelligence Integration
Dozens of United Kingdom Government Services Taken Offline Amid Critical Software Vulnerability
Barclays Announces Five Thousand Job Cuts Citing Artificial Intelligence Productivity Gains
Treasury Relaxes Post-Financial Crisis Accountability Rules for City of London Executives
United Kingdom Government Issues Unprecedented Guidance Urging Citizens to Stockpile Essential Supplies
United Kingdom Consumer Inflation Accelerates to Eleven-Month High Driven by Transport Costs
United Kingdom Public Sector Net Debt Breaches Three Trillion Pounds Ahead of Autumn Budget
Department for Science, Innovation and Technology Commits Fifty Million Pounds to Establish Regional Artificial Intelligence Innovation Clusters
Ofgem Directs Major Energy Suppliers to Expand Vulnerable Household Support Funds Ahead of Winter Heating Season
Home Office and National Police Chiefs Council Unveil New Intelligence-Led Strategy to Tackle Organised Immigration Crime Networks
First Minister John Swinney Secures Scottish Parliament Approval for Comprehensive Climate and Green Energy Infrastructure Strategy
National Health Service England and Trades Union Congress Finalize Agreement on Emergency Winter Staffing and Pay Frameworks
HM Treasury and Department for Business and Trade Announce Multi-Billion-Pound Sovereign Investment Pact to Spur Regional Advanced Manufacturing
Bank of England Governor Andrew Bailey Signals Potential for Faster Interest Rate Cuts as Domestic Inflation Pressures Ease Below Forecasts
Parliamentary Inquiry Highlights Urgent Need to Address Housing Shortage as Scottish Completions Hit Eleven-Year Low
United Kingdom and Singapore Sign Comprehensive Financial Agreement to Deepen Digital and Sustainable Market Ties
Greggs Announces Plan to Close Four Manufacturing Facilities and Cut Seven Hundred and Forty Jobs
International Monetary Fund Raises United Kingdom Economic Growth Forecast While Warning of Inflationary Pressures
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs Onto Gas to Lower Household Bills
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
×