British industry warns of factory closures due to energy crisis

The more energy-focused British manufacturers, including steel, glass, ceramics and paper makers, have warned the government that unless something is done about rising wholesale gas prices, they could be forced to stop production.

Wholesale gas prices have increased 400% this year in Europe, in part due to low inventories and strong demand from Asia, putting particular pressure on energy-intensive industries.

Industry heads spoke on Friday (8th) with business minister Kwasi Kwarteng, but said there was no immediate solution.

“If the government doesn’t take any action, basically what we’re going to see for the steel sector will be more and more breaks in production at certain times of the day and those breaks will get longer,” Gareth Stace, managing director of UK Steel told ITV News.

Likewise, Andrew Large, director general of the Confederation of Paper Industries, told the same broadcaster that he could not rule out the suspension of production by the factories due to rising energy costs.

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

After meeting with industry leaders on Friday, the Kwarteng department said it was determined to secure a competitive future for Britain’s energy-intensive industries.

He said he “has promised to continue to work closely with companies in the coming days to better understand and help mitigate the impacts of any cost increases faced by companies.”

However, some lawmakers within the ruling Conservative Party want more to be done by energy-intensive industries.

“I would like to see more government support for these industries in the near term to ensure that we don’t lose them from the UK and we don’t impede new investment,” Andrew Bridgen told the BBC.

“I think they would like to see a cap on the prices they will pay for gasoline.”

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

The post-Brexit labor shortage, exacerbated by the global tensions of the COVID-19 pandemic, has strained Britain’s supply chains for everything from fuel and pork to poultry and bottled water, putting any recovery from the pandemic under threat.