British prime minister freezes power costs two days after coming to energy

The price freeze will save around £1,000 ($1,150) a year for the average family.

The new British Prime Minister, Liz Trussannounced this Thursday, 8, its measures against energy crisiswhich include a two-year price freeze for households, ending a moratorium on hydraulic fracturing and re-examining the UK’s climate targets.

The price freeze will save about £1,000 ($1,150) a year for the average family, compared with an 80% increase in the tariff cap due on Oct. replacement for Boris Johnson.

Companies and institutions such as schools and hospitals will receive “equivalent aid for six months”, she told some deputies, who interrupted her several times during her speech.

“It’s time to be bold. We face an energy crisis (…) and these interventions will come at a cost”, he warned, however, after having dodged the opposition’s questions the day before about how it thinks about financing policies that should increase Britain’s already very high public debt.

The government will pay energy companies the difference in price, Truss replied, without providing a figure on how much the public treasury might cost, pending his new finance minister, Kwasi Kwarteng, to present a budget this month.

Path to carbon neutrality

Truss, a former executive at oil giant Shell, who during her campaign to become the new leader of the Conservative Party championed ultra-liberal policies, spoke out strongly against imposing more taxes on energy companies to help families.

Measures announced on Wednesday also include temporarily lifting energy taxes meant to fund the transition to carbon neutrality, which the UK has pledged to achieve by 2050 with a trajectory Truss said he wanted to re-examine.

Guaranteeing to be “fully committed” to the idea of ​​reaching zero net CO2 emissions by that date, the new prime minister explained that she wants to ensure that this does not involve an excessive burden on companies and consumers.

Truss did not specify how much the total package will cost, which several British media outlets estimate at 150 billion pounds.

That figure is more than double the £70bn that was spent to pay the salaries of employees who were out of work during the pandemic lockdowns.

More hydrocarbon extraction

The head of government and the new finance minister assured that, despite its cost, the policy will have “substantial benefits” for a British economy on the brink of recession, with inflation already above 10% and expected to reach 14% by the end. of the year.

Truss and Kwarteng said in a statement that the new measures would reduce inflation by between four and five percentage points.

The prime minister also announced an increase in permits for oil and gas extraction in the North Sea and an end to a moratorium on hydraulic fracturing, a controversial method of extracting fossil fuel that has until now been banned in the UK.

The construction of nuclear power plants and the production of renewable energy will also be promoted.

“Decades of short-term thinking on energy issues” and the inability to secure its supply have made the UK, which largely depends on gas imports to cover its energy needs, vulnerable to price crises, Truss denounced.

Source: AFP