The new British Prime Minister, Liz Truss, announced on Thursday, September 8, a two-year energy price freeze for individuals, at 2,500 pounds (more than 2,800 euros) per year for an average household, for combat the soaring cost of living.
The measure corresponds to a saving of around 1,000 pounds per year compared to the price increases that were expected on 1er October, said Mr.me Truss, who was speaking in Parliament and also announced that energy prices would be frozen for six months for businesses.
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.
“These interventions will have a cost”
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.
“It’s a time to be bold. We face 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, non-governmental organizations, trade unions, and even energy companies citing a humanitarian disaster this winter.
The United Kingdom is very dependent on gas prices, which have increased sevenfold in one year, in particular because of the tensions experienced in supply since the start of the war in Ukraine.
Hydraulic fracturing moratorium
Wholesale electricity and gas prices had hitherto been passed on entirely to businesses and households, despite aid granted by the previous government, which quickly proved to be 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.
Liz Truss also announced a review by the end of 2022 of the country’s trajectory to reach the goal of carbon neutrality in 2050, to ensure that it is achieved by the end of 2022.“a business-friendly and growth-friendly way”.
Mme Truss, which ensures stay “completely committed” to achieve this objective of carbon neutrality, also announced to British MPs the lifting of a moratorium on hydraulic fracturing in the country.