Firms paying bonuses may not get help with gas prices
Showdown: Kwasi Kwarteng and Rishi Sunak
Companies struggling with high gas prices could be rejected for government support if they pay bonuses to directors.
Cabinet Office minister Steven Barclay said in a radio interview that the Treasury would need to assess whether handing payments to such firms represented “value for money”.
His comments came as industries were hoping to secure bailouts after Chancellor Rishi Sunak was outmanoeuvred by Business Secretary Kwasi Kwarteng.
In an extraordinary spat between the two departments, the Treasury had insisted that the government had no plans to prop up firms facing soaring gas prices and accused Mr Kwarteng of being mistaken over his claims that talks had taken place on the issue.
But Downing Street is said to have come out in support of Mr Kwarteng who is championing government support for the chemicals, steel and other energy-intensive industries.
Mr Kwarteng has now delivered a business plan to Mr Sunak to support sectors of the economy that have been badly hit by the surge in fuel costs.
State-backed loans will be offered to stop factories shutting down and thousands of jobs being lost.
Meanwhile, ministers are being urged to impose a windfall tax on companies that are making substantial profits from the surge in gas price.
Labour MP Darren Jones, chairman of the Business, Energy and Industrial Strategy Select Committee, said: ““Everyone is looking around for money to help consumers and businesses in these difficult times, and that has to come from somewhere.
“The Business Secretary said … they were looking at the concept of a windfall tax ,but it looks to me like the Treasury haven’t been bothered to do the maths and don’t want to get involved in this problem.
The taxpayer-backed support plan emerged as US firm CF Industries, a key CO2 producer in the UK, agreed to continue supplies of the gas to the food and drinks industry.
Firms will now have to pay more for their CO2, but it will keep them in production.
Last month, the government stepped in to subsidise one of the firm’s plants after its shutdown due to high gas prices threatened food supplies.