UK Announces Massive PRICE CAP – A Bold Move!
(ConservativeHub.com) – Many Americans have been feeling the pinch when it comes to their energy bills in recent months, as gas, fuel, and electricity prices have all gone up. Europe has also been straining to make ends meet in the energy department, but Brits may get bit of relief in this arena now that their brand new Prime Minister Liz Truss has announced a price cap on Thursday.
UK Government Caps Household and Business Energy Bills
On Tuesday, September 6, Truss took over the office of UK Prime Minister from Boris Johnson. Two days later, she announced one of her first significant decisions: bailing out households from impending energy bills. According to The Wall Street Journal, the package, which could cost over $120 billion, should help slow inflation and push back a recession. However, the outlet also points out that the move will put the government in even deeper debt.
Specifically, the package, set to begin in October, will limit the amount energy companies can charge households to around 2,500 pounds per year, which is about $2,872. Predictions had expected the bills to increase to as much as 3,500 pounds per year, or about $4,000. The government will pay energy suppliers the difference. The program will continue for two years for homeowners and six months for businesses.
"Today, I am announcing urgent action to reform the United Kingdom's broken energy market."@Jacob_Rees_Mogg sets out plans for:
✅new household Energy Price Guarantee
✅new scheme for non-domestic users
✅long-term reform to increase domestic supplyhttps://t.co/agjN3ihbNn pic.twitter.com/IsxHk1XPXU— Dept for BEIS (@beisgovuk) September 8, 2022
Some Express Concern Over the Bold Move
The plan’s success could vary greatly based on oil and gas prices, something no one can predict, especially over the next two years. Some critics, such as director of the Institute for Fiscal Studies Paul Johnson, wonder how Truss will raise the money for the program because she’s vowed not to raise taxes on energy companies to pay for it. WSJ reported that Johnson called the lack of details regarding the cost “extraordinary, and deeply disappointing.”
According to one report from The Independent, Citizens Advice chief executive Dame Clare acknowledged that the move would serve as a relief for many. However, she suggested she was remaining cautious about it, pointing out that it’s still unknown how the measure will be paid for and that “we don’t want to see costs added to customer bills down the line.”
How Will Truss Move the Nation Forward?
This program, coming from a candidate who ran on a platform as a free-market conservative, is decidedly bold. Notably, it was one of her first announcements as she took her seat as prime minister. In an effort to combat energy concerns, she’s also allowing fracking and additional oil drilling in the North Sea.
While Britain gets much of its natural gas from Norway instead of Russia, the nation remains at the mercy of global prices for its fuel. Truss establishing long-term energy contracts could help keep the supply on a more even keel in the future.
Copyright 2022, ConservativeHub.com
