Liz Truss should announce around 10:00 GMT in Parliament a freeze on energy bills in Great Britain and measures which should in total cost around 100 billion pounds according to the British press. Astronomical amounts that rival the scale of the measures adopted during the pandemic.
The new Prime Minister, conservative with Thatcherite tendencies, should at the same time confirm tax cuts to stimulate an economy promised to recession at the end of the year.
She also refuses to extend a tax on the enormous profits of the oil giants, in order to encourage investment and extraction in the North Sea.
A lifting of the moratorium on “fracking” (hydraulic fracturing to extract shale oil and gas) may also be on the agenda, according to some British media, even if his predecessor Boris Johnson was doubtful about the interest of such a measure.
“I will take immediate action to help people with their energy bills, but I also want us to secure our energy supply,” she said in her first parliamentary questioning on Wednesday.
The ceiling on energy bills for individuals should in theory increase by 80% on 1 October. It has doubled over a year and, if nothing is done, should rise again next year to around 5,000 pounds per year for an average household, according to estimates, fueling double-digit inflation which is racing.
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 companies and households, despite the aid granted by the previous government which quickly proved to be very insufficient.
Economists, NGOs, unions and even energy companies have constantly warned that a majority of British households risk falling into great precariousness this winter.
Liz Truss would thus be on the verge of freezing the annual bills for an average household at 2,500 pounds, which represents, according to several media including the Times, a colossal expenditure of 150 billion pounds, which would be financed by debt.
That’s more than the £70billion spent on paying the wages of furloughed workers for the duration of the pandemic.
It is also a drastic shift from the campaign led by Liz Truss, who described direct aid as “band-aids” that would not solve the basic problems.
– Who will pay? –
The cocktail of massive direct aid and tax cuts frightens the markets, which fear a new serious slippage in public finances after that of the pandemic.
A sign of investor mistrust, British 10-year Treasury bonds jumped more than 3% on Tuesday, the highest in a decade.
But the new Chancellor of the Exchequer Kwasi Kwarteng assured on Wednesday that while a rise in public borrowing was “necessary in the short term”, the new government was aiming for “monetary stability and budgetary discipline in the medium term” thanks to growth. of the economy which would be faster than that of the public debt.
According to Neil Schearing, an economist at Capital Economics, a freeze on gas and electricity prices for consumers could calm inflation, which he said would peak at just 11% in October.
The economy would still go into recession but this would be limited to a contraction of only 0.5%, he adds.
At Westminster on Wednesday, Ms Truss carefully avoided answering the question posed by the opposition: who will pay?
Labor leader Keir Starmer accuses Ms Truss of ‘protecting (the giants’) oil and gas profits and forcing people to foot the bill’.
Without targeted tax increases, this massive aid package will help taxpayers get through the winter but they will have to pay for it afterwards for years, Labor insisted.
Infrastructure managers, energy companies and environmentalists also denounce the apparent absence of any energy saving measures by Liz Truss.
They are urgently calling for policies to insulate UK buildings, for many veritable thermal sieves.
