Fears of Christmas chaos for British businesses and consumers are growing after the industry warned of factory closures in the coming weeks as fuel prices soar.
In an emergency conference call with energy-intensive industries, Commerce Secretary Kwasi Quarting warned that electricity costs five times their normal level were “unsustainable” for a large number of businesses, some of which are at risk. Irreparable damage to facilities if they are forced to initiate shutdown.
Meanwhile, in a sign of growing concern in Downing Street about a shortage of stores at Christmas, Boris Johnson has appointed a supply chain czar to try to ensure the proper flow of products after weeks of empty shelves in supermarkets and traffic jams at ports. Downing Street itself has acknowledged that the problems facing businesses across the UK are now “acute”.
Sir Keir Starmer accused the prime minister of allowing the country to slide into chaos by failing to put in place a plan to deal with a shortage of workers, including drivers of heavy vehicles and meat processors, or unprecedented increases in global energy prices.
Labor called Johnson a “candidate” after turning to former Tesco chief executive Sir David Lewis as a supply chain consultant, just days after companies were accused of creating a jobs crisis by paying bad employees and relying on cheap migrant workers.
Sir David will head up a new supply chain advisory group that will run through the end of this year in an effort to avoid product shortages in a critical holiday period of high demand.
Ofgem also warned of a “significant” increase in home heating costs in the spring, industry sources said independent They predicted the April increase in the energy price ceiling would be a whopping 34 per cent, pushing the bills of around 15m homes at default rates to £1,700.
The events came as the Bank of England warned of a wave of business bankruptcies that have been left at risk due to the amount of debt piling up during the COVID-19 pandemic, including government loans to keep them at bay.
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An investigation by the Office for National Statistics found that one in six adults in Britain (17 per cent) was unable to purchase basic food items and 23 per cent of non-essential food items because they had not been available in stores in the past two weeks. ..
Friday’s video meeting between Kwarteng and Energy Intensive Users Group (EIUG) came after the government rejected proposals that it might have to limit industrial energy use to a seventies-style three days a week this winter due to the global supply shock that economists fear will hamper the recovery from epidemic.
The Chinese regime has ordered coal mines to ramp up production after the country suffered blackouts in recent weeks, and the European Union Commission is working on potential plans to pool and store natural gas purchases.
Speaking after the talks, UK Steel CEO Gareth Stacey called on the government to act as quickly as possible to relieve pressure on the industry by cutting green taxes on energy bills as well as grid fees.
“The prime minister said on Wednesday that the economy should move towards higher wages,” Stas said. “The steel sector is a highly paid employer, providing highly skilled jobs that pay far more than the regional average.”
“Failure to take action means we are moving away from a high-wage economy and walking blindly into a low-wage economy. We are an industry that has to be at the center of settlement, bringing wealth and opportunity to communities outside of London.”
EIUG President Dr.
Kwarteng told representatives from sectors such as steel, chemicals, paper, metal products and glass that he was “willing to help our industrial base.”
“We want to help as best we can,” the trade secretary said. “There has to be an effort across Whitehall and I can help make their case.”
But there was no immediate announcement of action after what sources said was a listening exercise. Officials should gather more data and information from companies in the coming weeks.
Shadow Business Secretary Ed Miliband opined: “This is an energy crisis that has occurred in Downing Street. Kwasi Quarting is struggling to get to know the heads of the industry, but it’s all just a charlatan.”
This messy Conservative government got us into this mess in the first place and has no plans to fix it. The warm words at the meeting will be a cool respite for consumers and businesses facing a steady rise in energy prices and a cost-of-living crisis.”
The Director-General of the Paper Industries Association, Andrew Large, noted that it was “very clear” across all sectors that there are “grave risks of plant closures as a result of unsustainable gas costs”.
“In these circumstances, there will be a gradual gradual impact through supply chains, directly to manufacturing, retail consumer and other products. So the risks are very real,” he cautioned.
Stace said producers are struggling with energy prices five times the average last year, as well as sudden, erratic price hikes.
“Long and frequent downtimes in production have become a reality” for manufacturers, he added. “These conditions are simply not sustainable for the sector. We urge the government to take measures, as happened in Italy and Portugal, to support the industry.”
“Energy prices are so high that some companies have had to suspend production even at a time when the steel market is incredibly healthy.”
While Transport Secretary Grant Shapps has made it clear that the UK is now “at the end” of the oil crisis that has left pumps out for more than two weeks, the new supply chain czar will face another set of potential shortages this Christmas.
In addition to costly and protracted bureaucratic Brexit procedures at the border, supply chain firms have been disrupted by an estimated shortage of 100,000 heavy-vehicle drivers, many of whom are EU citizens who have stopped working in the UK after it withdrew from the bloc.
Supply chain problems have been exacerbated dramatically by the Covid pandemic, which has halted the steady flow of imports and exports around the world and raised the cost of a 40-foot shipping container from China to Europe from about $2,000 to $14,000 or more.
British farmers are growing increasingly angry at the government’s decision to allow only 1,000 visas for meat-processing employees, instead of the 15,000 the industry claims it needs.
The shortage of butchers and slaughterhouse workers has led to the slaughter of up to 120,000 pigs, while British turkeys will also be off the menu in many homes due to a shortage of farm workers and processors.
Johnson said Sir David “brings a wealth of experience that will help us continue to protect our business and supply chains” by preparing them for the future in the face of “global supply issues”.
But labor business spokeswoman Seema Malhotra said: “British companies deserve better than the 10th”.
“One moment, the prime minister attacks businesses and blames them for every evil he has created with his chaotic government, and the next, a big businessman begs for his help in solving the shortage and crisis in the chain of Christmas supplies.”
The FBI, which has been calling for a task force inspired by the State Emergency Committee Cobra, welcomed Sir David’s appointment.
CEO Tony Dunker said: “Creating a fast-moving task force, with business and government around the table, will ensure that government is better informed about the nature and scale of challenges and can formulate responses quickly.”
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