Liz Truss announces energy price freeze
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“It’s a time to be bold. We are facing an energy crisis (…) and these interventions will have a cost”, justified the leader.
New British Prime Minister Liz Truss on Thursday unveiled a two-year energy price freeze for individuals, at 2,500 pounds (over 2,800 euros) a year for an average household, in the face of soaring living costs. . The long-awaited measure corresponds to a saving of around 1,000 pounds a year compared to the price increases which were expected on October 1, said Liz Truss, who was speaking in front of Parliament and also announced that the prices of the energy for six months for businesses.
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The support measures, which also include a temporary lifting of energy taxes intended to finance the transition to carbon neutrality, were not quantified on Thursday but will cost tens of billions of pounds, financed by borrowing. According to several media, the addition would amount to 150 billion pounds. That’s more than the £70bn spent on paying the wages of furloughed workers throughout the pandemic.
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Strong dependence on gas prices
“It’s a time to be bold. We are facing an energy crisis (…) and these interventions will have a cost“, justified the leader in Parliament. Pressure was mounting for the government to halt soaring energy bills and the cost of living crisis, with economists, NGOs, unions and even energy companies warning of a humanitarian disaster this winter.
The United Kingdom is very dependent on gas prices, which have increased sevenfold over one year, in particular because of supply tensions since the start of the war in Ukraine. The wholesale prices of electricity and gas were hitherto entirely passed on to businesses and households, despite the aid granted by the previous government, which quickly proved to be very insufficient. Thursday’s announcements notably come on top of a £400 reduction in bills for individuals that had already been announced by the previous executive.
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