On Thursday, new Prime Minister Liz Truss will come up with a plan to save families and businesses from financial ruin due to rising energy bills.
At her first questions from the prime minister, Ms Truss confirmed that her plan, which is expected to freeze the family’s bills at around £ 2,500, will be presented to Parliament.
He rejected the idea of using an unexpected tax on the windfall profits made by the oil and gas giants to finance the package, which is said to cost up to £ 150 billion.
But the prospect of a massive increase in lending to pay for the energy package shook currency markets on Wednesday as the battered pound slipped to its lowest level against the dollar since 1985.
Ms. Truss told Municipalities: “I will make sure that in our energy plan we will help support businesses and people in the immediate price crisis, as well as make sure that long-term supplies are available.
“I understand that people all over our country are struggling with the cost of living and struggling with energy bills.
“That is why I, as Prime Minister, will take immediate action to help people with the cost of their energy bills and tomorrow I will make an announcement to this House about this and give people the certainty to make sure they are able to get for all of this. winter and being able to have energy supplies and to be able to afford it “.
In response to Labor leader Sir Keir Starmer, who pushed for a levy on the £ 170bn of “excess profits” oil and gas producers are expected to enjoy in the coming years, Ms Truss turned down an unexpected tax. .
“I am against an unexpected tax, I believe it is the wrong thing to discourage companies from investing in the UK just when the economy needs to grow,” she said.
Sir Keir said refusing to tax the profits made by oil and gas companies due to high global prices would leave taxpayers bearing the cost of freezing energy for decades.
“The Prime Minister knows he now has no choice but to support an energy price freeze, but it won’t be cheap and the real choice, the political choice is who will pay,” he said.
“Are you really telling us that it will leave these huge excess profits on the table and make the workers foot the bill for decades to come?”
The Prime Minister’s official spokesperson said the current earnings tax imposed by Boris Johnson is still in effect, despite Ms. Truss’s opposition to such levies.
And Downing Street has indicated that the moratorium on fracking in England could be lifted in Ms Truss’s energy package despite the 2019 conservative manifesto opposing the end of the ban without science proving it can be done safely.
Ms. Truss promised during her leadership campaign that she would end opposition to shale gas extraction in places where it is supported by local communities.
On Wednesday, the Prime Minister’s press officer said: “He clarified his position during the campaign, but I have no intention of discussing this energy package.”
Ms Truss began the Prime Minister’s Questions with a conciliatory tone, promising to work with parliamentarians across the House to address “the challenges we face” at a “vital time for our country.”
But his confrontation with Sir Keir has shown clear dividing lines on fiscal policy, with the new Prime Minister determined to eliminate planned corporate tax hikes for businesses.
Sir Keir said: “Not only is the Prime Minister refusing to extend the tax on windfall gains, but he is also choosing to hand over a tax cut to the water companies that pollute our beaches. He has chosen to grant the banks a tax cut.
“Add it all up and companies that are already doing well are getting a £ 17 billion tax cut as workers pay for the cost of living crisis, stroke victims wait an hour for an ambulance and criminals walk by. the streets with impunity “.
The corporation tax was supposed to rise from 19% to 25% in 2023, but Ms Truss said this would discourage investors and the UK cannot “tax the road to growth”.
In a sign of the political battles to come, Sir Keir said, “There is nothing new in the Tory fantasy of the cascading economy, nothing new in this Tory Prime Minister who has nodded with every decision he put into it. in this mess and now she says how awful it is, and doesn’t she see that there is nothing new in a conservative prime minister that when asked who pays she says “it’s you, the workers of Britain”? “
Ms. Truss told him: “I will take immediate steps to make sure I have lower taxes and grow the economy, and in this way I will ensure a positive future for our country and we will get Britain moving.”
But Ms. Truss has been accused of avoiding scrutiny over how her energy plans will be presented to Parliament.
Thursday will open a debate on energy costs, but, unlike a formal ministerial statement, this will not result in constant questions from MPs about the plan.
His administration also dealt with questions after it emerged that the Prime Minister’s official spokesperson did not attend the first meeting of the new-look cabinet, limiting the ability of the media to question what was being discussed.
Meanwhile, Ms. Truss continued to make appointments to her government: former community secretary Robert Jenrick and Victoria Prentis were appointed ministers despite supporting Rishi Sunak in the leadership race.
Veteran diplomat Sir Tim Barrow has been appointed National Security Advisor, replacing Sir Stephen Lovegrove who moves to become a Defense Industry Advisor.
More controversial, he has given arch-Brexiteer Steve Baker a ministerial role in the Northern Ireland Office.
The decision was branded as “hateful” and a “red flag” by SDLP MP Claire Hanna, as she claimed that Ms. Truss appeared to “continue down her predecessor’s diplomatically ignorant path.”
Mr. Baker, who organized the Brexiteer uprising that ultimately brought down Theresa May, described the Northern Ireland Protocol as “a thorn in the side of relations between us and Ireland”.
It supported the government’s controversial reforms to the post-Brexit treaty, which exacerbated tensions with the EU.