Hopes that firms could receive a major package of support to weather the energy crisis this winter faded as the Treasury denied there have been talks with the business department.
Business Secretary Kwasi Kwarteng said on Sunday that he is working closely with Chancellor Rishi Sunak to help industry as wholesale gas prices spiral.
But a senior Treasury source insisted to the PA news agency that no such talks have taken place despite firms pleading for help to prevent further collapses.
Mr Kwarteng said he is certain that the lights will stay on in the UK this winter as firms warned they may have to reduce working hours to sustain themselves during the crisis.
The minister guaranteed he will keep the energy price cap for consumers in place throughout the winter but said he will not “bail out failing energy suppliers”, though he did not rule out a cap for firms.
Asked if he has approached the Treasury about subsidies, he told Sky’s Trevor Phillips on Sunday: “No, I haven’t. We’ve already got subsidies in place and it’s very clear that a lot of those are working.
“On the consumer side we’ve got an energy price cap, and on the industry side we have measures where we support industries, heavy electricity users.
“What I’m very clear about is we need to help them get through this situation – it’s a difficult situation, gas prices, electricity prices are at very high levels right across the world and of course I’m speaking to Government colleagues, particularly in the Treasury to try and see a way through this.
“I can’t come on your programme and say we’re going to have a price cap because we’re trying to work out what the nature of that support might be.”
Mr Kwarteng acknowledged it is a “critical situation” but denied he has asked for billions of pounds worth of support when asked about whether he is considering a price cap for businesses or a winter package.
He told the BBC’s The Andrew Marr Show: “I’ve 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.”
But it was heavily disputed whether the Chancellor or his department have been involved in any talks.
A senior Treasury source bluntly told PA: “The Treasury has not been involved in talks.”
Some Tory MPs are among those calling for additional help for energy-intensive industries, such as steel manufacture, during the crisis.
Mr Kwarteng faced demands for a “winter package of measures” to prevent further interruptions to supply chains during a meeting with industry representatives on Friday.
Energy Intensive Users Group chairman Richard Leese had told the BBC: “It’s needed absolutely right now – gas prices are at an unprecedented level and the businesses that manufacture the goods that we need are trying to operate under these unprecedented conditions.”
Asked if he was going to give extra help to energy intensive industries, like steel, Mr Kwarteng said: “We’re looking to find a solution.”
Told by Andrew Marr that it sounds like a yes, Mr Kwarteng replied: “No, that doesn’t sound like yes at all. We already have existing support and we’re looking to see if that’s sufficient to get us through this situation.”
Pressed if he is absolutely sure the lights will stay on this winter, the Business Secretary replied: “Yes, I am.”
Earlier, Mr Kwarteng had written in the Sunday Express that keeping the price cap unchanged ahead of its next scheduled change in April is “non-negotiable for me”.
He argued the cap will hold back instant bill hikes for millions of customers, but some company bosses have argued the move will ultimately be costly for taxpayers.
Proposing reforms including increasing the review of the cap from twice to four times a year, Utilita Energy’s non-executive chairman Derek Lickorish said: “The cap is not fit for purpose.”
“There is no doubt that there is going to be a huge cost paid by customers for failed suppliers… certainly well over £100 million for every 200,000 customers that fail,” he added BBC Radio 4’s Today programme.
“The Government has to look at means by which they can support not only energy suppliers but also big industry.”
Mr Kwarteng also suggested people could wrap up warmer this winter rather than use more energy.
Asked if he is advising people to wear another woolly jumper and pair of socks, he told Sky: “It’s up to people – it’s amazing how different people’s cold thresholds can be very different.
“Some people feel comfortable wrapped up in lots of different clothes, others wear relatively little – I think people should be sensible. I think people should do what they feel comfortable with.”
But he insisted he was not telling people to turn down their thermostat and said: “My job as an energy minister is not to tell people how many layers of clothing they should wear, that’s not really my job.”