British industry could “shut down” due to a lack of gas, the government warned.
High gas prices will persist all winter and UK industry may be forced to “shut down” if supplies run out, warned the founder of manufacturing giant Ineos.
Sir Jim Ratcliffe said a shortage of gas storage facilities has left the nation vulnerable – and warned the government that a sharp winter could lead to widespread shutdowns as demand outstrips supply.
Appears on ITVs PestonWhen asked if the country could close due to a prolonged cold spell, the industrialist replied, “Yes, you would close the industry.”
Sir Jim added, “I think it is quite difficult to predict how long this type of current situation will last, but I suppose if you were a bettor you would assume that it would likely last at least winter, because obviously our gas demand increases in winter. “
It comes when Chancellor Rishi Sunak seemed to downplay the support the government can offer for rising gas costs – saying, “It is not the government’s job” to manage prices.
After attending a G7 finance ministers’ conference in Washington, Sunak said, “We are ready to work with business and provide support when needed.”
The Chancellor added: “But in general I believe in a market economy because it has served us very well in this country. It is not the government’s job to manage the price of every single product. “
Sunak is according to the Financial Times.
In asking the government to provide short-term subsidies, major manufacturers such as steel and chemical manufacturers have warned that they may have to shut down facilities this winter if energy levels remain high.
Energy experts have also warned that a harsh winter could force Britain to cut power supplies to businesses – factories are closing on a throwback to the three-day week of the 1970s.
Sir Jim urged Sunak to provide sufficient assistance to ensure that “the UK economy cannot be forced to ransom because we have not organized our gas situation very well”.
Britain has 10 days of storage, said the Ineos founder – describing that number as “a bit pathetic for a nation as important as Britain” as countries on the continent have four or five times as much.
“When we had what, if you remember, the beast from the east four years ago, we ran out of gas in Britain in a day or two,” said Sir Jim.
“If we ran out of gas, it would be a disaster for the elderly who weren’t able to heat the house, for the industry that should have shut down. But we were there within a few days, and we made that clear. “
Labor leader Sir Keir Starmer said the government should “come out of hiding” and work with business on the issue. “You posted your out-of-office reply. While other countries take action and act, the UK is sitting back surprisingly complacent. “
The Department of Business, Energy and Industrial Strategy (BEIS) said ministers and officials are working with industry “to better understand and mitigate the impact of high global gas prices.”
Meanwhile, Sunak insisted that despite the ongoing supply chain crisis, there will be a “good amount of Christmas gifts” this year.
A cargo jam at Felixstowe has led Maersk to choose to divert ships from the port of Suffolk, while similar traffic jams have been observed in other parts of the world, including the United States.
“We are doing absolutely everything we can to alleviate some of these challenges,” said Sunak. “They are global in nature, so we cannot solve every single problem, but I am confident that there will be a good supply of goods for everyone.”
It comes when the Confederation of British Industry (CBI) and 41 other trading groups urged Sunak to cut business rates and make fundamental changes to the system.
The Labor Party’s shadow chancellor Rachel Reeves also called for reform. The system is no longer functional. “It penalizes high street stores in favor of online giants and discourages companies from investing in new green technologies,” she said.