United Kingdom: public support for energy bills

In the United Kingdom, the government of the new Prime Minister Liz Truss has just supplemented its support measures in the face of the explosion of energy bills (electricity and gas) on September 21 with support for businesses and public enterprises. similar measure advertised for individuals.

UK Government details help businesses with energy bills

Fewer taxes, richer richer and massive government subsidies to reduce gas and electricity bills. This is broadly the economic program of the new British Prime Minister Liz Truss.

On her accession to the throne on 6 September, she announced that she would freeze energy prices. In detail, it will rather be state aid up to about half of the bills. The Ministry of Energy and Business thus elaborated in a press release on 21 September 2022 the contours of the support for companies, public institutions and NGOs.

The government will therefore determine “a subsidized wholesale price”which is settled at “less than half of expected wholesale prices this winter”. According to the press release, this support is “will be equivalent” to that already announced for individuals.

The latter will cap energy prices for two years at £2,500 a year per average household, which will be around 1,000 euros less than the expected wholesale prices from October. This reduction includes the removal of certain organic taxes.

Aid financed by public borrowing

For companies, the amount of support will depend on the situation and the current contract, but should amount to between a third and half of the invoice. For a pub or school, public support will give a 40% discount.

The director’s aim is to bring inflation (which reached 9.9% over a year) to a standstill by limiting the explosion of energy prices, then restart growth through major tax cuts.

This aid will be financed by borrowing and its cost could reach £100 billion over two years. Since the government has at the same time decided to massively lower taxes on companies and the richest, tax revenues should fall sharply. Enough to fear severe cuts in public services from Great Britaingiven the liberal ideology that animates Liz Truss.

“We intervened to prevent businesses from collapsing, protect jobs and curb inflation,” defends in the press release the new finance minister (and ex-energy minister), Kwasi Kwarteng.

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