Liz Truss: Announces mammoth package to tackle energy precision

of Thanasis Gavou

The long-awaited package of measures to deal with energy precision will be announced in the House of Commons shortly before noon local time by the new Prime Minister of the United Kingdom, Liz Truss.

In an announcement which commentators say will define her tenure, less than 48 hours after she officially takes office, Ms Truss will announce a package estimated to cost around £150bn, in the biggest government intervention in the British history.

£69 billion was given to the Pandemic Job Preservation Program and £137 billion was spent on the 2008 bank bailout.

The British Prime Minister is expected to announce a freeze on household energy bills at around £2,500 a year. Broadly speaking, it will keep the annual charge to households at current levels (1,971 a year) plus the extraordinary horizontal allowance announced by the Johnson government for each household.

This intervention will prevent the previously announced increase in the annual charge for households to £3,549 and a further rise to over £5,500 next spring.

The account freeze is likely to last at least 18 months to protect households this winter and next.

Similar measures will be announced for businesses as well, but probably with a shorter duration.

To implement the measure, the government will invite energy supply companies to sign binding contracts that will set a limit on the price of natural gas charged to households and businesses.

The additional costs for energy companies will be covered by the government through an increase in government borrowing, not by taxing energy companies’ surplus profits, as the opposition is demanding.

Shortly before the measures were announced, Liz Truss said: “I know families and businesses across the country are worried about how they will cope this autumn and winter. Putin’s war in Ukraine and the use of gas supplies in Europe as a weapon is driving up global prices and this has made it clearer that we need to boost long-term energy security and supply.

“We will take immediate action to help people and businesses with their bills, but we will also take decisive action to tackle these problems at the root so we don’t find ourselves in this position again.”

With the last phrase, Ms. Trass refers to her decision, also to be announced today, to lift the ban on environmentally controversial shale gas extraction operations, which the Conservatives had imposed in 2019.

In the same context, he will confirm that new drilling licenses will be granted for the extraction of oil and natural gas in the North Sea.

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