Energy businesses paying large bonuses may not be eligible for state-backed support

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A minister has indicated that companies paying large bonuses or dividends may not be eligible for state-backed financial aid, which is believed to help businesses hit hardest by rising energy prices.

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It comes as Treasury proposals submitted on Monday by the trade secretary, Quasi Quarteng, were considered, amid an extraordinary turf war between the two departments over government aid to the sector.

Boris Johnson has reportedly taken the side of Mr Quarteng and backed a multi-pound bailout to prevent energy-intensive industries from going to the wall, but no announcement is expected on Tuesday.

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Granthshala It also revealed that the UK could be forced to rely on other countries for key nuclear and defense components unless the minister offers an energy bailout to heavy industry – on Rishi Sunak for accepting the proposals and apply pressure.

Steve Barclay, Chief Secretary of the Cabinet Office, said, times radio That the government would need to examine “what is value for money and what is proportionate” when considering taxpayer support for this sector.

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“Have they paid dividend recently? Are they paying bigger bonus? We will need to understand the detail rather than just kneel for the taxpayer’s response,” he said.

“Perfect, otherwise you will put pressure on me in terms of value for money for the taxpayer and the huge amount already provided by the Treasury to the industry. So it is about balance and engagement”.

Granthshala Understands that the requirements for firms may be similar Coronavirus Big Business Interruption Loan Scheme (CLBILS) – Introduced at the beginning of the pandemic to provide financial support.

The scheme, which is now closed to new applications, helped medium and large-sized businesses access loans and other forms of finance of up to £200m.

Those seeking less than £50 million were to ensure that the dividend did not increase while any loan amounts were outstanding. Businesses requesting more than this amount had to agree not to pay any cash bonuses to senior management until the facility was fully repaid, while placing similar restrictions for dividends.

Richard Warren, head of policy for trade body UK Steel, said state support would be welcome, but industry representatives were not told by Mr Quarteng whether help would be available.

“Lending will be a very short-term solution, but we need a mechanism to secure the industry in the long run,” he said.

“We have not seen the details of what the secretary of state has put forward. We need to look at those details but the reported loan plan will not fix the underlying problem.

“This can solve a problem for businesses that have immediate cash flow problems. It allows them to pay their electricity bills.

“But that’s not the problem; the problem is the excessive energy costs. As long as you produce steel, you can’t sell it and you also have a huge debt.”

The British steel industry has been calling for years to be placed on an equal footing with competitors from Germany and France. Plants in the UK pay 80 percent more for their energy than their German rivals, according to UK Steel calculations.

UK Steel general director Gareth Stace said BBC News: “If as a result of this package we are still paying 80 percent more for energy than our competitors in continental Europe, that is a really big crisis we are going through at the moment “

Conservative frontbencher Lord Agnew added to Son on Monday that rising energy costs had nothing to do with supply shortages but were due to “geopolitical moves” by Russia to pressure Europe. The Treasury minister appeared to go further than the government before pointing the finger directly at Moscow for the current crisis.

“The current pressure on gas prices has nothing to do with the amount of gas available,” he told peers in the House of Lords. This is a geopolitical move by Russia to put pressure on Europe and we are caught in it. Public ownership of our own utilities will not make any difference.”

The Treasury has been contacted for comment.

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Credit: www.independent.co.uk /

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