MOSCOW, 8 Sep — PRIME. The British government will allocate 40 billion pounds to energy companies in connection with rising prices and freezing household energy bills, said the country’s new prime minister, Liz Truss.
“I’m announcing today that together with the Bank of England we have developed a new £40 billion (support) program to provide companies in the wholesale energy market with the liquidity they need to cope with price volatility,” Truss said during a speech in parliament.
Earlier, the prime minister announced a freeze on energy bills for the population from October 1 for the next two years. Thus, the average annual bill for gas and electricity will not exceed 2,500 pounds. Truss’ intention could cost the country around £130bn ($150bn) over a year and a half, according to British media. This is due to regulator Ofgem raising the maximum allowable annual electricity bill for consumers to £3,549 effective October 1, more than a thousand pounds more than the price cap proposed by Truss. Energy consultancy Auxilione has forecast that the UK’s annual energy bill cap will be £5,066 from January and a record £6,552 from April.
Truss has not yet announced exactly how this assistance program will be funded. Given that she is a vocal advocate for lowering taxes on the public and has repeatedly spoken out against the introduction of a tax on corporate excess profits, some media have suggested that government loans will cover the difference between real energy prices and the amount that will be charged to citizens. In the future, they will be paid over the next 10-20 years as a surcharge on consumer energy bills.