The founder of manufacturing giant Ineos has warned that high gas prices will last through the winter and that the UK sector may be forced to “shut down” if supplies run out.
Mr. Jim Ratcliffe warned that a severe winter could lead to widespread closure since demand exceeds supply due to a shortage of gas storage in the country.
If a long cold period forced a shutdown of all government operations, as Peston speculated, the industrialist would respond, “Yeah, in which case you’d shut down the industry.”
When asked how long he thought the current scenario would remain, Sir Jim responded, “I think that’s rather impossible to anticipate,” adding, “but you know, I suppose if you were a betting man you’d expect it would probably stretch into at least the winter.”
Meanwhile, chancellor Rishi Sunak sought to downplay the government’s ability to combat rising gas prices, saying that “managing pricing is not the government’s duty.”
After attending the G7 finance ministers meeting in Washington, Sunak remarked, “We’re ready to engage with business and support them as required.”
He went on to say: But generally speaking, I support a market economy because it has served us so well in our country. Not every single product’s pricing should be managed by government intervention.
According to the Financial Times, Sunak would put any financial assistance granted to the steel industry or other significant energy consumers through rigors’ “value for money” testing.
Major firms, such as steel and chemical producers, have urged the government to grant short-term subsidies, warning that if energy levels remain high this winter, they may have to shut down factories.
Energy experts have also warned that a hard winter could compel the United Kingdom to restrict energy supplies for businesses – closing manufacturing in a return to the three-day week of the 1970s.
To avoid “holding the UK economy to ransom because we haven’t organized our gas position very effectively,” Sir Jim pleaded with Sunak.
“A bit dismal actually for a nation as significant as the UK,” INEOS founder remarked of the UK’s 10-day storage capacity.
“Countries on the continent have four or five times that amount.”
The UK was on the verge of running out of gas four years ago, when the Beast From The East hit, Sir Jim reminisced.
“There would have been a catastrophe for the elderly, who wouldn’t have been able to heat their homes, and for industry, which would have been forced to shut down if we ran out of gas. However, we were just a few days away and we made that point.”
Mr. Starmer said the government should “come out of hiding” and collaborate with businesses on the problem. “They’ve switched on their out-of-office message. Instead of acting, the UK is staggeringly complacent, sitting back.”
Business, Energy, and Industrial Strategy (BEIS) Ministers and officials are working with industry to “better understand and help mitigate the implications of rising global gas prices,” according to the BEIS.
Despite the ongoing supply chain crisis, Sunak claimed that “a good amount of Christmas items will be available” this year.
Since there is too much cargo in Felixstowe, Maersk has decided to divert ships away from the Suffolk port. Similar traffic jams have occurred around the world, including the United States.
As Sunak put it, “we’re doing everything we can to mitigate some of these difficulties.” There are global issues so we can’t solve them all, but I’m optimistic that there will be enough things to go around for everyone.
CBI and 41 other trade associations have requested Sunak to reduce business tariffs and make major reforms to the system. Sunak has refused to do so.
Opposition shadow chancellor Rachel Reeves said the current system is unworkable and urged for changes.
According to her, the policy penalizes brick-and-mortar retailers in favor of internet giants and discourages them from investing in green technologies.
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