LONDON (Parliament Politics Magazine) – Britain’s new Prime Minister, Liz Truss promises to make an announcement tomorrow to take “immediate action” to handle the sky-rocketing energy bills.Â
Her decision to forgo extending the windfall tax in order to pay for her energy plans has led to accusations that she is protecting profits and forcing working people to foot the tab.
Energy price cap freezing is expected to be announced by Ms. Truss with sources saying the proposal might cost up to £150 billion and be financed primarily through borrowing.
Asked during the PMQs if she would implement a windfall tax on energy firms to fund her proposals, Ms Truss said taxing their way to growth was not an option.Â
It sparked a heated argument with Labour leader Sir Keir Starmer, who claimed that the Treasury predicts that over the period of next two years, energy producers will make an excess profit of £170 billion.
You couldn’t help but support a freeze on energy prices, he said, adding that the political decision is who will foot the bill.
Was she really saying that she was going to leave those huge excess profits on the table and make working people foot the bill for decades to come, he asked.
In an indication of the political fights that lie ahead, Sir Keir also criticised her intention to stop the hike in corporation tax. This had been expected to climb to 25% in 2023 from 19%, but Ms Truss said it would dissuade investors.
There was nothing new about the Tory fantasy of trickle-down economics, Sir Keir declared. Nothing new about the new Tory prime minister who nodded through every decision that got the country into that mess and now said how terrible it was. And couldn’t she see there was nothing new about a Tory prime minister who, when asked who pays, says “It’s you, the working people of Britain.”
But Ms Truss struck back saying there was nothing new about a Labour leader who was calling for more rise in taxes, and accused Sir Keir of failing to “understand aspiration”.
She asserted she was taking immediate action to ensure they had lower taxes and they grew the economy.
She also claimed that while securing long-term supply, her energy plan would benefit both businesses and households.
The reports have said that yearly bills would be frozen at about £2,500 – more than £500 above the current price cap but £1,000 less than the limit due to be imposed in October.
The government’s present windfall tax, which Labour believes has a huge tax loophole, would be introduced with a new windfall tax on the profits of oil and gas businesses. Labour has called for the energy price cap to be frozen now.
