Energy crisis: Treasury denies conversations with Kwasi Kwarteng regarding business relief

As the issues caused by the current energy crisis deepen, sources from the Treasury have said there are no current plans for financial relief in energy-intensive industries.

The statement came after business secretary Kwasi Kwarteng indicated that conversations with the Treasury had begun in an interview with Sky News on October 10th. 

This rift between government departments followed a call on the 8th of October. During this conversation, senior figures in industries such as steel and paper met with the business secretary to discuss the spiralling energy costs and ramifications for their businesses. After warnings that factories could be closed within days, the business secretary assured them he would be speaking with the Treasury regarding several proposals to prevent this from happening.

When Kwarteng was questioned on Sky News about whether such conversations had taken place he responded: “I have not asked for billions. We've got existing schemes. I'm working very closely with Rishi Sunak, the Chancellor, to get us through this situation.

"I think he showed a great deal of flexibility when he allowed £500 million to be dispersed by local authorities for vulnerable consumers, and we're working to see what we can do in terms of protecting industry."

Shortly after this however, a Treasury source got in touch with Sky to deny talks were taking place. They also took the opportunity to seemingly take a dig at the BEIS (Department for Business, Energy and Industrial Strategy in the process.

"This is not the first time the BEIS Secretary has made things up in interviews. To be crystal clear, the Treasury is not involved in any talks”, read a statement from the unnamed source.

The nature of the rebuke indicates that animosity may have been brewing between the two departments for some time. While it’s not uncommon for separate branches of government to butt heads, the nature and timing of the confusion has caused concerns over the handling of the situation. 

Downing Street has yet to comment on the misunderstanding. However, Boris Johnson’s spokesperson issued categorical support for Kwarteng, clarifying that both the Treasury and BEIS would “continue to work very closely together, as the public would expect”.

All in all it hasn’t been a great week for Kwarteng. He faced accusations during the Tory conference a few days earlier that he should have acted more promptly to manage the petrol shortages which resulted in huge queues and empty pumps around the country.

With Boris Johnson currently on holiday in Marbella it isn’t immediately clear how or when the current spat will be resolved.