British industry warns of factory closures without fuel cost help

Soaring gas prices have forced companies to pause production

Kwasi Kwarteng has been meeting industry leaders to discuss the energy crisis. Getty Images

Britain's most energy-intensive manufacturers, including producers of steel, glass, ceramics and paper, have warned the government that unless something is done about soaring wholesale gas prices they could be forced to shut down production.

Prices have increased by 400 per cent this year in Europe, partly due to low stocks and strong demand from Asia, putting pressure on energy-intensive industries.

Industry heads held talks on Friday with business minister Kwasi Kwarteng but said these ended with no immediate solutions.

"If the government doesn't take any action then basically what we'll see for the steel sector is more and more pauses of production in certain times of the day and those pauses will become longer," Gareth Stace, director general of UK Steel, told ITV News.

Andrew Large, director general of the Confederation of Paper Industries, said he could not rule out factories having to suspend production because of increased energy costs.

David Dalton of the British Glass Manufacturers Association said some companies were days away from halting production.

After meeting the industry leaders on Friday, Mr Kwarteng's department said he was determined to secure a competitive future for Britain's energy intensive industries.

It said he "promised to continue to work closely with companies over the coming days to further understand and help mitigate the impacts of any cost increases faced by businesses".

However, some politicians are calling for more to be done for energy-intensive industries.

"I would like to see more government support for these industries in the short term to ensure that we don't lose them from the UK and we don't deter further investment," MP Andrew Bridgen told the BBC.

"I think they'd like to see a cap on the prices they're going to pay for gas."

Britain's economy is already struggling with a supply chain crisis.

A post-Brexit shortage of workers, exacerbated by the global strains of the Covid-19 pandemic, has hit Britain's supply chains involving everything from fuel to poultry and bottled water.