Britain’s government signs a giant blank cheque for energy bills
EconomistDec 24, 2022
The Facts
On Thurs., UK PM Liz Truss announced a new "energy price guarantee" designed to reduce the cost of energy bills to less than half the figure currently forecast for the coming winter, down to £2.5K for the average household.
The new average price cap will reportedly apply to private households until Oct. 2024, while the PM has also pledged to support businesses struggling with the cost of energy bills for up to six months and further targeted support for vulnerable firms in the months beyond.
The Spin
Left narrative
All parts of the political spectrum agree that intervention is needed on energy bills - the real discussion is over who will pay for it. Truss's firm ideological commitment to a small state means she is leaving a bill, created in the first place by corporate greed, with the taxpayer. If the Labour party were in government, Kier Starmer would instate a windfall tax to effectively redistribute wealth and properly protect consumers.
Right narrative
It's insane that, at a time when the UK economy is trying to balance the budget and reduce the deficit after investments made during the COVID pandemic, Truss is contributing to the growing specter of recession with such huge spending plans. It would make far more sense to scrap the price cap and support vulnerable households - this freeze is a totally un-conservative intervention and a terrible economic policy.
