Rishi Sunak blocks Boris Johnson bailout: Chancellor wins battle for firm handouts

Rishi Sunak blocks Boris Johnson bailout: Chancellor wins battle with PM over subsidies for companies hit by energy crisis

  • Chancellor Rishi Sunak has blocked a manufacturing sector bailout
  • Business Secretary Kwasi Kwarteng previously said there was a rescue deal
  • The Prime Minister supported Mr Kwarteng’s plan while Mr Sunak publicly opposed it
  • Now the Chancellor has succeeded in destroying the plan, which is no longer on the table


Chancellor Rishi Sunak has blocked a Boris Johnson-backed multimillion-pound production bailout in a sign of mounting tensions in the cabinet.

It follows an argument with Minister of Affairs Kwasi Kwarteng, who last month told broadcasters that he was in talks with the Treasury about a bailout deal for industries hit by rising energy prices.

The allegation sparked a stunning reprimand, with a source from Mr. Sunak’s department accusing Mr. Kwarteng of “made things up in interviews.”

However, the chancellor was embarrassed after the prime minister sided with the minister of affairs.

Chancellor Rishi Sunak has blocked a proposed manufacturing sector bailout after weeks of disagreements with Prime Minister and Minister of Affairs Kwasi Kwarteng

No. 10 ordered the two departments to work together on a possible solution, which prompted Mr. Kwarteng to submit a proposal for taxpayers’ money.

Options put forward included government-backed loans and energy price subsidies for troubled companies.

Convinced that sectors such as steel, chemicals and ceramics needed help, Mr Johnson prepared for a rescue operation worth hundreds of millions of pounds.

But the Daily Mail can reveal that Mr Sunak has successfully halted the plan, which is no longer under consideration.

Government sources confirmed that with energy prices falling from record highs in recent weeks, there was little chance of it being resurrected.

It comes as senior Conservative MPs, nicknamed the ‘men in gray suits’, went to meet Mr Johnson in Downing Street yesterday amid continued unrest in party ranks during the government’s crackdown.

Sir Graham Brady, chairman of the 1922 Committee of Tory Backbenchers, confirmed that the executive had met the Prime Minister in No. 10, but declined to comment on their discussions.

The meeting comes after a difficult few weeks for Mr Johnson, starting with his failed attempt to revise the standard rules for MPs, which led to renewed accusations of Tory ‘sleaze’.

This was followed by criticism that long-awaited announcements about rail improvements for the North and Midlands and the funding of adult social care in England failed to live up to previous promises.

Business secretary Kwasi Kwarteng had previously told broadcasters that he was in talks with the treasury about a possible rescue deal.

Business secretary Kwasi Kwarteng had previously told broadcasters that he was in talks with the treasury about a possible rescue deal.

The events culminated in Mr Johnson’s rambunctious speech to the CBI, in which he lost part of his text and talked about his visit to the Peppa Pig World theme park.

There are reports that Tory whips believe a number of MPs have filed a no-confidence vote against Mr Johnson with Sir Graham – although they are well below the 54 required under Conservative Party rules to trigger a vote on his leadership .

Yesterday Downing Street tried to downplay tensions between Johnson and Sunak after claims the chancellor was growing frustrated with the ‘chaotic’ operation at number 10.

The Chancellor’s Chief of Staff, Liam Booth-Smith, has been accused by some in a toxic anonymous briefing that there was “a lot of concern in the building” about Mr Johnson – although the Treasury has strenuously denied that he was behind the quotes given to the BBC.

The Prime Minister’s spokesperson insisted that No. 10 and No. 11 “continue to work very well together at all levels.”

When asked whether Mr Johnson had confidence in Mr Booth-Smith, his spokesman said: “Of course the Prime Minister has confidence in the team at number 11.

“They work very closely together to deliver on the priorities of the public.”

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